Does Business Insurance cover lawsuits?

Business insurance covers lawsuits as long as you have the appropriate business liability insurance for your situation and enough liability coverage to pay your legal costs. To ensure that enough liability coverage is in place for extreme circumstances like a lawsuit that exceeds $1 million in damages, many businesses buy a commercial umbrella liability policy.

Certain liability exclusions also apply, such as if an injury or damage was expected, or was caused intentionally. Some policies also have something called a “workmanship” exclusion, and some exclude coverage of punitive damages. Liability insurance is available in many different forms, including:

• General liability
• Professional liability, “errors and omissions” and malpractice
• Directors and officers liability
• Product liability
• Premises or property liability
• Employer’s liability
• Employment practices liability
• Environmental and pollution liability