Business Liability Insurance
As an entrepreneur, you are constantly exposed to various risks, including damage that your company, employees, or products may cause to third parties.
Whether it’s material damage or personal injury, business liability insurance not only provides coverage but also legal support. This allows you to run your business with peace of mind.
Request a consultation now and operate without worries.
What is Business Liability Insurance?
A business liability insurance policy, also known as a Commercial General Liability (CGL) Insurance, covers damage caused by your company, employees, or products to third parties. This can include damage to others’ property, bodily injury, or injury sustained by your employees during working hours.
This insurance ensures that your company does not face financial difficulties due to third-party claims. Depending on your choice, you are insured per incident up to a certain limit, for example, € 2.5 million per claim.
What Does Business Liability Insurance Cover?
For companies involved in developing, building, or operating solar power installations, a business liability insurance policy can provide coverage in the following situations, among others:
- Damage to others’ property due to your activities
- Damage to others’ property caused by a defective product
- Bodily injury or injury sustained by your employee while working
- Death of an employee due to a workplace accident
- Bodily injury to individuals due to your activities
- Bodily injury to individuals caused by the product you sell
Each claim is subject to the deductible specified in your policy. There is no deductible for bodily injury claims.
Examples of Real-Life Business liability claims
Bodily Injury to Third Parties Due to Work at the Construction Site
Example: A supplier enters the construction site of the solar park and gets injured after tripping over poorly cordoned-off construction materials.
Environmental Damage Due to Errors During Installation
Example: During excavation work for cable laying, an underground oil or gas pipeline is accidentally damaged, leading to an environmental issue and soil contamination.
Damage to Third-Party Property During Construction
Example: During the installation of solar panels at a solar park, a crane accidentally damages a nearby farm or another property, such as a neighbour’s fence.
What Does Business Liability Insurance Not Cover?
Below are some items that are generally not covered:
- Damage to yourself, your company, or products you sell
- Pure financial loss (loss without material damage or injury)
- Damage caused intentionally
- Damage caused by the use of an aircraft or motor vehicle
- Occupational diseases caused by, for example, asbestos
- Damage to software or data files
- Fines or ransom resulting from cybercrime
- Damage due to professional errors, such as a miscalculation
Why Business Liability Insurance?
As an entrepreneur, you can be held liable for various reasons. Taking out business liability insurance gives you the assurance that your company is protected against damage caused by your business, employees, or products to third parties.
Who should buy Business Liability Insurance?
This insurance is essential for all entrepreneurs, regardless of the size or nature of your business. Whether you run a sole proprietorship or a large company with multiple employees, business liability insurance protects you against various liability risks.
Run-Off and Retroactive Coverage
Optionally, you can choose coverage for retroactive risks and rum-off.
Retroactive Coverage
Retroactive coverage covers damage caused before the start date of the insurance but reported after the start date. This only applies if you were unaware of the damage when taking out the insurance. This coverage is possible for up to 3 years back.
Run-Off Coverage
Run-off coverage covers damage caused during the policy period but reported after the policy end date. This is particularly relevant if you terminate or switch the insurance. Additionally, if you cease your business activities, you can include this risk in your insurance to protect yourself against claims that arise after business closure.
What other Insurances do Entrepreneurs often Take Out?
In addition to Business Liability Insurance, entrepreneurs often take out the following insurances:
- Directors and Officers Liability Insurance (D&O)
- Professional Indemnity Insurance
- Construction All Risks Insurance (CAR)
- Cargo Insurance
- Business Legal Expenses Insurance
Consider also taking out Cyber Insurance
Do you want to protect your business against liability risks?
Frequently asked questions
Yes, however, business liability insurance has limited cover for environmental damage. It is a standard coverage.
You are insured for:
- Sudden environmental contamination that you have caused. In this case, only the damage to persons caused by the contamination is covered.
- Sudden environmental contamination caused by a defect in your product. In this case, only damage to others’ property is covered.
All other damage is not covered. Think, for example, of damage that occurs gradually, such as from a leaking transformer that pollutes the ground over the years. For these types of risks, you need Environmental Damage Insurance.
No, Business Liability Insurance is not legally required, but many entrepreneurs choose to take one out anyway. Accidents can happen quickly, whether by you, an employee, or your product. This is, of course, unpleasant, and it can sometimes cost a lot of money.
With Business Liability Insurance, you are insured against these costs, saving you both money and worries. Sometimes Business Liability Insurance is required, for example, if a supplier, client, or financier demands it for extra security.
A Business Liability Insurance covers damage that your company accidentally causes to others. This insurance reimburses the damage and the legal costs to the injured party.
If you suffer damage caused by someone else and want to hire a lawyer to recover this damage, it is not covered by Business Liability Insurance. For this, you need Business Legal Expenses Insurance. This insurance covers the costs of legal assistance when you suffer damage caused by someone else and want to recover it.
A Business Liability Insurance protects you against third-party claims but not your damages.
Yes, the insurance premium is generally tax-deductible. The premium is considered a business expense, which means you can deduct the premium from your profits when filing your tax return. However, tax laws vary by country, so it’s advisable to seek professional tax advice to ensure compliance with local regulations.
Yes, business liability insurance also covers temporary workers, interns, family members working in the business, and volunteers.
Yes, if you want to be covered as an entrepreneur against damage that your company, employees, or products cause to third parties, you need a Business Liability Insurance. Personal liability insurance that you have taken out as an individual does not provide coverage for business liability.
You can cancel in writing or by email, observing your notice period.
Business liability insurance covers damage to property and persons, while professional liability insurance covers financial loss due to professional errors.
Contact us immediately. We will assist you with handling the claim and ensure proper support. To report a claim or for more information on the next steps, visit our informative claim reporting page. Learn more about reporting claims!
