A big benefit of a corporation is the individual’s limited liability for business debts, although the protection does have its limits.
Corporation directors, officers and employees may each be held financially liable for any personal actions. There’s a variety of corporate insurance, otherwise known as business insurance, and some protect the individuals involved in the company and the corporation itself.
General liability insurance will protect corporations against claims of negligence against company representatives, products and services. It typically covers legal claims due to an accident or an injury.
The insurance policy will pay for any costs incurred from medical expenses, libel, slander, bodily injury or property damage. There are situations where a client has requested proof of general liability insurance prior to going into business with the company.
This insurance will cover the loss and damage of any company property following any of the following events: smoke damage, fire, vandalism, civil disobedience and storms. Corporations that don’t own valuable buildings and equipment should consider investing in property insurance. All-risk policies do typically cover any type of incident, excluding anything that has been specifically ruled out.
Otherwise known as errors and omissions insurance, professional liability insurance acts as a protectant for a company against claims from clients of malpractice, negligence and errors. The concept is similar to general liability insurance, claims of negligently performing professional services are excluded from general liability policies.
Companies that provide services covering the area of healthcare, consulting, finance, accounting, law and insurance are recommended to take out professional liability insurance. Depending on the profession and location, the state may even require the corporation to carry professional liability coverage.
Directors and officers insurance
Similar to professional liability claims, management liability lawsuits are often excluded from a general liability policy. Officers and directors insurance protects those people from claims of mismanagement of company affairs.
However, this particular insurance is often association with public companies, private corporations can also benefit from the coverage. Lawsuits regarding mismanagement of private corporations can birth from unhappy employees, upset investors and frustrated creditors. This insurance covers legal fees settlements and other associated lawsuit expenses.