Will Business Insurance Cover My Company if Someone Sues Me?

Here’s what you should know:

  • The liability coverage on your policy helps cover the cost of lawsuits, including your legal defense and any damages you’re ordered to pay.
  • You select how much liability coverage your company carries.
  • You can choose optional coverage for product and professional services liability.

Q:Question My business is doing pretty well these days. The one thing that could derail everything is a major lawsuit. The thought of it can keep me up at night. Does my business insurance cover this risk?

Farmers Insurance® agent Joel Brekken of Duluth, Minnesota, explains how your business insurance can help if someone sues your company.

A:Answer Most business owners have the same concerns you do. A lawsuit can jeopardize everything you’ve worked to build. That’s why Farmers® business policies come standard with liability insurance. It helps cover your financial responsibility for injury to others or damage to their property up to the limit you select. Liability coverage can also provide coverage for your legal defense in court. As the business owner, you select how much liability coverage you want on your policy.

Injury to employees is covered by workers’ compensation insurance, which is required by law in most states. It provides coverage for both medical treatment and lost wages due to time off work.

You have additional options when it comes to liability coverage. For example, professional liability insurance helps cover your business for damage claims resulting from a service it provided. You can also add liability coverage on the products you make or sell. This isn’t as complex as it might sound. Farmers offers a business owner policy (BOP) that bundles all of your coverage needs into a single policy.

Umbrella policies are another great way that you can protect yourself. These offer much higher limits for liability exposures and help you protect your assets — whatever the situation.

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