Limited Liability Insurance
Anyone who owns a business knows that having various insurance policies simply goes with the
territory. Purchasing a limited liability insurance policy is a good idea because it covers the specific
portion of a company that a particular owner or partner controls. This puts a necessary cap on their exposure,
should the business ever be sued. The limited nature of this policy keeps premiums down and also confines the
individual’s financial responsibility in the event of a lawsuit.
A business may be sued for a variety of reasons, among them: personal injuries, failure to
fully comply with the terms of a contract, outstanding unpaid debts, or any number of other possible issues. A
lawsuit resulting from any of these problems can adversely affect both the personal and business finances of each
of the company’s partners. With such insurance, however, each involved party enjoys a degree of financial
protection that can safeguard their family’s stability in uncertain circumstances.
Limited Liability Insurance - Attributes
Limited liability insurance protects the company and its owners against the
vagaries of the modern business climate. It actually enables higher productivity because, although employees must
still work with care in an effort to be error-free, they also understand that they are protected in the event of a
mistake. With such coverage, no single error will likely be powerful enough to utterly destroy the
Most businesses which purchase this type of insurance are owned by two or more
partners. These partners each own a certain share of the company and their insurance coverage should reflect the
percentage of the business which each owns. In most cases, the partners can find an insurance company willing to
insure them as a group, which keeps premium costs down and simplifies recordkeeping and paperwork.
Limited Liability Insurance - Benefits
The business world is a very uncertain place, but limited liability insurance
helps people to protect their portion of it. This insurance makes it easier for investors to take risks because
they know their investment is covered. Essentially, it enables both new and experienced business people to get a
new operation off the ground with minimal personal risk.
This insurance limits the individual’s financial responsibility to a reasonable
level. It can help partners pay for legal defense fees and also help pay a plaintiff in the event of a judgment.
Most of all, it provides a necessary layer of peace of mind that can be difficult to acquire in today’s business