If I Am Being Sued, What Does my Business Insurance Cover?
In the unlikely event that your company is faced with a lawsuit, you are going to be thankful you have good business insurance in place. You, as a business owner, may feel strongly however about such an incident. You care about your company, the products or services you provide and the customers and clients you work with. You also care very much for your employees. So, why would you, of all people, be in a position like this?
Where Did My Company Go Wrong?
First of all, you might want to try and relax in the face of a pending lawsuit. After all you have general liability insurance in place, so there should be no cause for worrying that this lawsuit is going to bleed your company dry and put you out of business. Another thing you want to realize is that many lawsuits are actually either dropped or settled out of court.
You are correct that your business runs as ethically as you possible can get it to run. Yet, there are reasons why customers, clients, employees or even competing companies might file claims against your company. These reasons may have less to do with your company truly making a mistake and more to do with the person or entity filing the claim.
While you have your insurance to cover the cost of legal fees and court costs, what might wind up happening is that lawsuit may be found to have no basis in its claim. Unfortunately, some people take things to court hoping to find themselves earning a significant amount of money. They do not understand that if they have no real claim, that case can be thrown out of court.
Think of classic “slip and fall” cases. They are heard about all the time. It can be possible for a business to be found negligent in keeping their shop or restaurant clean and safe which results in someone slipping and hurting themselves. However, sometimes you or your company did not do anything wrong at all.
If there is an ice storm and a customer falls and hurts themselves badly in an improperly cleaned parking lot, there may be a case for a legitimate lawsuit and your company will have to pay. Or, at least your insurance will so that you can keep your company running while you instill new policies for your workers to follow to keep such a thing from happening again. Then again, it could be the case is unfounded and thrown out of court so remember it is possible to be sued when your company is not guilty of doing anything wrong.
What Does Get Covered?
Whether the claim your business is facing is legitimate or not, your business insurance protects you. You want to go over your policy and ask your insurance provider for any assistance you may need in fighting the claim. Basically, you would be looking at having your attorney fees, court costs and legal fees paid for through your policy. When your insurance company goes to investigate the validity of the lawsuit their costs are also covered by your policy.
The attorney who handles the case even if it winds up going through court and ending in a judgment is paid through your insurance coverage. The judgment itself or any medical expenses due as a result of the claim would also be paid for out of your insurance. In the event a legitimate or somewhat frivolous suit faces your company relax and know how much business insurance covers you.
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