Protect your company with California Liability Insurance
The first line of defense against lawsuits for many home and business owners is a liability insurance policy. Liability insurance covers claims that may arise from an owner’s actions or those of their employees that cause bodily injury, property damage, personal injuries such as defamation (libel and slander), or advertising injury (however, some homeowner policies cover libel and slander). Because these claims can potentially expose you to millions of dollars in damages, both legal fees and settlement costs, should you be sued, it might seem like common sense to invest in liability insurance.
However, there are some other factors to consider before buying a California Liability Insurance policy.
First, how much protection do you need? Generally speaking, a million dollars of coverage is adequate for most businesses and homes. However, some high-risk business operations such as construction or agriculture may require policies with limits of several million dollars. In addition, some homeowner’s policies include additional liability coverage options called “increased cost of defense” and “personal umbrella.”
For many people, the cost of liability insurance may be high. However, if you are sued, liability coverage can help pay for your legal defense, damages awarded by a court (including interest) and settlement costs (which could include attorney’s fees), and medical expenses for someone injured on your property. That’s why it’s essential to consider the costs of not having liability insurance.
For example, even if you are sued and found not liable for someone’s injuries or property damage, chances are you’ll still be stuck with legal fees and court costs. Even worse is the possibility that you might have to pay damages out-of-pocket because there was no liability coverage.
Before buying liability insurance, it’s essential to understand the limits of your policy. It is also vital that you review your policy at least once a year (home and/or auto policies can be reviewed concurrently). If you aren’t sure what you have, contact your agent or insurer to find out.
As mentioned earlier, many homeowners’ insurance policies include coverage for libel and slander (defamation), which is the written or spoken communication of a false statement that injures a person’s reputation. If you are sued for libel, your homeowner policy may provide defense costs and damages associated with the lawsuit; however, it will not pay for any award given to the plaintiff, nor will it cover court costs.
If you want to protect yourself from a potentially significant claim, be sure to include liability insurance as part of your household budget. However, it is still essential to review your policy at least once a year and make sure that you understand exactly what protection you have should the need arise.
Examples of Liability Insurance California
Business owners in California must take many safety precautions to make their company safe for their employees and customers. By providing a safe work environment, you can avoid potential lawsuits from workplace injuries, accidents on the premises, or defective products. Product liability insurance protects your company from claims based on product liability, as well as any damages caused by those items.
If you own rental properties, liability insurance for California landlords protects you from several different claims. This includes slip and fall lawsuits, broken leases, disputes with tenants, and more. In addition to protecting your assets against damage or loss resulting from accidents on the premises, landlord liability insurance even covers some business expenses in the event of a lawsuit.
Theft is one area where California liability insurance can be costly. Suppose you own or even work in an industry with high theft rates (i.e., retail). In that case, there are policies available to protect you from claims related to missing inventory, employee dishonesty, shoplifting, and more.
Since cars are the most common targets for thieves in LA, liability insurance can help with claims arising from the theft of your vehicle. If you are ever sued over a car accident, uninsured or underinsured motorist coverage will pay for damages to your car or medical expenses if someone else is at fault. It even covers your legal fees if you are sued.
Liability Insurance California State Requirements
California is one of many states that require car owners to carry liability insurance. Because California has among the highest minimum requirements in the country, you generally do not have to worry about satisfying state minimums when buying your policy.
However, if you are financing a new or used vehicle, your lender may have additional coverage requirements. Most lenders will only finance up to 80% of a car’s value, and they may also require comprehensive and collision insurance. If you own an expensive car, you might also need gap coverage, which pays the difference between what your insurance policy will pay for damages and what you owe on the loan if your vehicle is totaled.
Some companies offer umbrella liability policies that provide additional coverage above and beyond your existing insurance policy. Umbrella liability policies typically cover you for sums above the limits of car and homeowner’s insurance, as well as claims related to libel and slander, false arrest, wrongful eviction, and more. They may also include business overhead expenses if you are sued while doing business.
In addition to serving as a supplement to your existing insurance policy, umbrella liability policies can cover costs associated with a lawsuit. For example, suppose you are sued over a car accident and face a judgment of $50,000 in damages but only have $30,000 in liability coverage through your car insurance provider. In that case, the umbrella policy will pay the remaining balance.
What’s covered by a Personal Umbrella Policy (PUP)
The aptly-named personal umbrella policy (PUP) provides additional liability insurance. The policy is attached to your home and auto policies, increasing the limit on the liability coverage you already have. Suppose there’s a claim against you, such as a car accident or slip and fall incident; this additional coverage can help pay for any damages without affecting your premiums.
The umbrella policy adds protection if you are sued for more than the liability coverage included in your auto or homeowners insurance. It also covers personal injury claims, which can consist of libel and slander. Additional living expenses to temporarily move due to a lawsuit are covered if you rent or own your home, but not if you live with relatives.
What the policy covers:
- The limit on your auto and homeowners liability coverage is increased, up to $1 million
- It also covers personal injury claims such as libel and slander
- Additional living expenses if you need to move due to a lawsuit temporarily are covered for renters or owners of a home but not those who live with relatives