Contractor Liability Insurance

Contractor Liability Insurance

For a very long time, contractors have been left in the wild when it came of matters of insurance. But thanks to the new Contractor Liability Insurance, contractors too can enjoy insurance services specially designed for them. Here below is an overlook of this type of insurance.

What is Contractor Liability Insurance?

This is a type of insurance that protects a contractor from any loses that may occur during his/her course of work. There are many dangers in relation to this profession that only need an insurance company to take care of.

Reasons for Contractor Liability Insurance

There are many reasons that have necessitated the need to have this kind of insurance. The reasons benefit both the contractor and the client involved with a contractor. Some of the reasons are mentioned below here.

The contractor liability insurance helps a contractor to get several permits for execution of his work. There are some permits that require applicants to have liability insurance and therefore only contractors with this type of insurance will benefit from it fully.

Another benefit of having contractor liability insurance is that it helps you get more contracts. Many clients prefer to hire contractors who are insured to work for them. Therefore, you get an upper hand over some contracts if you have this insurance.

A benefit of Contractor Liability Insurance to the client is that he/she is assured of quality service and in the event of property damage; there is compensation without having to go to courts. This is why many clients prefer contractors who have their liability insurances.

A contractor who has a company and has employed staff to work for him/her stands to benefit from this insurance. Any accident of an employee is covered in the insurance and therefore no employee will sue such a contractor. And even if the contractor is sued, the insurance company will gladly take care of the compensation fee.

The quality of work by contractor who is insured is always better than the non-insured contractor. The confidence that an insured contractor has is what brings about the good quality of service.

Therefore, if you are a contractor and you have not yet insured your professional work, it is high time you do so because clients have resorted to use contractors with valid Contractor Liability Insurance to work for them.

Commercial Liability Insurance

Commercial Liability Insurance

Commercial liability insurance is a special type of insurance meant for covering liability related damages of a business. Insurance packages vary and some cover all of the damages while others only cover a part. Legal costs (arising from claims etc) may also be included.

Commercial liability insurers are required to pay all of the legal costs of a covered liability lawsuit. There are various covered liability claims including property damage, personal injury, etc. Furthermore, any other damages, other than punitive damages and the like, are covered under your liability insurance claim.

There are special classifications for various insurance coverage options, so one type of business might have a higher premium in comparison to another type of business. Even if both businesses had clean records, their insurance premiums would still not be equal.

The extent of coverage a business needs will depend upon the business and its activities, assigning it a risk degree.

Commercial insurance costs and the costs of possible claims can be cut down using many techniques.

You can take certain measures to cut down your insurance costs. Cooperate with your insurance provider and keep them informed about any and every incident or shortcoming which may make your company stand face to face with a lawsuit.

And you could certainly make use of some tips to cut down against cost of claims. Product quality must be of the highest standards. Company records must be clean and updated. Employee skills should be of a high level. Your insurer will be happy to guide you about ways of best utilizing your insurance.

Not getting a commercial liability insurance is a serious risk. It protects your business in unexpected circumstances. The importance of it for a business owner is no less than a car insurance for a driver.

We live in a very litigious society. Your business could be sued at anytime for a wide range of reasons. Imagine your company does heavy duty manufacturing: your employees use dangerous equipment that could potential kill them if misused or they are not paying attention on the job. Or a slippery, wet floor in your business office could result in a lawsuit. Furthermore, you could potentially be put out of business if you have no liability insurance coverage. You would have to pay all damages (which can be quite expensive) and the legal fees for any claim out of your company’s assets.

When obtaining commercial liability insurance, make sure the insurance provider is reliable and provides excellent customer service. Your business deserves the best. However, it is good to keep affordability in mind too.


Professional Insurance

what is professional liability insurance?

You might have heard of all sorts of insurance, from health, life, car, financial, and what not. They come in very handy in cases where untoward or unwanted events occur such as sickness, untimely death, damage to vehicle due to accident, business slow down among many others. But there is another kind of insurance directed specifically to various professionals called “Professional Liability Insurance”.

It is otherwise known as E&O insurance, or the errors and omissions insurance and is entirely different from a general liability insurance that offers only limited coverage. There are cases where claimants can make it appear that you have become negligent even though in reality you did not, it could cost you a big sum of money. What the professional liability insurance does is it protects you against a claim due to negligence in advising or performing a specific type of service.

Some of the most common professionals that can take benefit from this kind of insurance policy are teachers, nurses, contractors, consultants, web designers, and all other professions who are into giving advice or rendering professional services.

For example, a patient who felt like the care provided by the nurse is substandard or lacking and didn’t even like the services given may want to sue the nurse in question. For consultants, an advice deemed to be a bad one, especially if it causes great losses in terms of finances to a firm or an individual may bring the issue to court and demand for reimbursement.

Nothing is foolproof when it comes to human errors. And should you make any mistake that is seriously costly, having professional liability insurance should help cover the funding for the costs incurred if ever the litigation battle has been lost. So basically, it is also a way of securing yourself and your business’ future in terms of financial stability.

It contributes to peace of mind knowing that you are well covered for any possible litigation against you for any costly error that may occur while rendering professional services. Plus the fact that it is always better to be prepared than not with all the surprises that life has to offer.

Lastly, when choosing an insurance provider, make sure that you did get the chance to check out others so you can compare prices and their offerings. Paying a little extra for better coverage is always a smart move than compromising your insurance by settling with cheaper ones with non-solid provisions just to cut down on costs.


Product Liability Insurance

What Is Product Liability Insurance?

Product liability insurance protects inventors, manufactures and sellers from flaws and defects in any publicly available product. Unprotected, your business can be responsible for:

Medical Costs

Compensation for Damages

Economic Damange Punitive Damages Attorneys’ Fees

These damages and fees, depending on the number of people affected, can put a business into bankruptcy. With a simple product liability insurance policy, a business can protect itself from most or all of these costs. A product liability policy covers:

Production Flaws

Insufficient Warnings Design Defects

Recently, some Chinese manufactures produced plastic children’s toys in the presence of lead. Multiple parties would be responsible for the production flaw in this product. The manufactures could be sued for producing the product in the presence of dangerous chemicals. The retail outlet or seller can be held responsible for selling a product that is not safe for the end user.

Insufficient warnings include an undesired side-effect of a product that was not properly label/explained. An example of this could include cereals produced in a plant that also processes peanuts. The cereal could physically harm individuals allergic to peanuts. The cereal may be produced from a source that does not contain any trace of peanuts, but production can add peanut residue to the cereal. Without a sufficient warning, a hyper allergenic consumer is vulnerable to the cereal and the company is responsible.

A design defect can be something as simple as a handle breaking off a hot coffee mug to an airbag failing to deploy in an accident. In both situations, the company is responsible for their product failing to perform as advertised.

Basically, if your company is involved in the production or sales for a product, then your company needs protection through liability insurance. It’s not worth the risk, one liability case can destroy a company.

Pricing for liability insurance is based on the type of product, the number of sales, the company’s role in the supply chain and the intended market for the product. Many businesses will lie about the volume of sales or where a product is produced to receive a lower premium. Remember, if an insurance company finds that you lied about a critical piece for determining a premium, they can (and probably will) charge substantial under insurance penalties.

When making decisions about product liability insurance, your best bet is to work with a product liability insurance broker. This individual knows the questions to ask to get you a policy that protects your business but does not provide more coverage that you require.


Products Liability

Products Liability

Products Liability is a law where the manufacturers will be held responsible for the injuries caused by their manufactured products. These laws differ from one state to another particularly in a country like the United States. So, the products liability comes to picture when there is a damage or inconvenience caused by the products manufactured by the respective manufacturers. The defects caused because of bad manufacture, design failure, product not functioning and fail often etc. Manufacturing defects mainly involve usage of bad and poor quality of raw material, lethargic workmanship. Releasing products without testing them and resulting in non-functioning will also be considered and is liable. Many of the Product liability cases are very difficult to prove as most of the companies do spend years of testing before they release a product to the market.

Non education of statutory warnings will also result in involving products liability as it becomes the responsibility of the corresponding company to warn the public regarding the outcomes of their product according to their normal and abnormal usages. The other situation that can result in products liability is breach of warranty. This refers to a company which fails to provide support as promised within the stipulated warranty period. The law states that, if a company is manufacturing and releasing a product to the public with a corresponding period of warranty, then the company has to abide by their warranty rules and has no rights to breach the same. Strict liability is another part of products liability and this comes when the user or the customer faces injury because of the product. The end users have the right to sue the respective organization for their damages and medication for which the injured party has to prove that the used product is defective and was the reason behind injury.

The lawyers and the laws are strict against products liability cases and the lawyers in this field are specialized and skilled. It is advisable to consult a skilled lawyer in order to claim the corresponding damage and it is also important to note that these cases are often complex and expensive as well. Many of the lawyers handle these cases based on the corresponding contingency fee, which means they don’t get any legal fees until the case is completely settled and the judgment is announced for the same. So, once you have a strong proof it is then advisable to approach a skilled lawyer who has good knowledge and great skill in handling such cases.


Errors and Omissions Insurance

What Is Errors and Omissions Insurance?

Errors and omissions insurance, or professional liability insurance, will protect you in case anyone ever brings a claim against you and your professional services. Errors and omissions insurance provides important coverage to professionals in a wide variety of fields, running the gamut from accountants to film crews to pet groomers to funeral home directors.

Due to its critical nature, it’s crucial for professionals to make sure they select an agent well-versed in errors and omissions insurance. Because general liability insurance is much different from E&O, even the most knowledgeable general liability agents usually don’t have the right expertise to provide the necessary errors & omissions coverage.

To find the right errors and omissions insurance for your needs, a simple online search to can help identify appropriate agents or brokers. Asking colleagues for referrals is another good option, while some professionals, such as CPAs, can check with their industry’s professional associations for suitable recommendations.

Once you’ve identified potential matches, ask if they can provide:

The number of errors and omissions policies in your profession on their


Several references

Payment options

Coverage for independent contractors and additional insureds

A policy tailored to your specific circumstances

The ability to choose from among several different carriers

The last item is particularly important: Each carrier offers slightly varied errors and omissions insurance – being able to compare endorsements and coverage helps ensure finding the very best policy for your needs.

After you’ve found the right E&O insurance agent for your business, the application process is usually the same: fill out an application, provide a resume, and include the insurance portion of the contract you’ll be working under (this allows the agent to tailor our errors and emissions policy directly to your needs without questions or uncertainties).

New businesses often are required to provide a business plan to help the agent determine the extent of their errors and omissions exposure.

Most errors & omissions insurance policies last for a full year and follow the company or individual for whom it was written. As you take on new projects or add staff, make sure to add specific names to your E&O policy as needed.

And, when renewal times rolls around, be sure to update your number of employees and revenue figures with your insurance agent.

Like so many things in life, an errors and omissions insurance policy is only as good as the effort you put into it. Be diligent in researching and vetting your E&O agent to ensure the best fit possible.


Errors and Omissions

Errors and Omissions

Insurance is always there to ensure that the different needs of all clients are met. There are various needs in insurance that has necessitated the need to have different types of insurances. Amongst the many is Errors & Omissions. This is not a very popular type of insurance known to the general public for only a few people use this type of insurance.

What is Errors & Omissions Insurance?

Errors and omissions is the type of insurance that insures an individual or a company against clients who sue them for a service provided or failed to be provided. It therefore cushions you against a client who will claim that you were negligent during your course of work.

Who needs Errors & Omissions Insurance?

Given its nature, professionals in different industries are the main targets. Doctors, lawyers, architects, engineers etc, are some of the professionals who need this type of insurance. This is because the nature of their work may lead them to several accusations from unsatisfied clients.

Insuring for an E&O does not mean that a professional is bound to make errors in his line of duty but rather act as a precaution should there an accusation be raised by a client.

When is the best time to get Errors & Omissions?

It is always good to get this insurance before any loss. You never know when an error will occur and get sued for it. Therefore, the sooner you get this cover the better for your business.

What does Errors & Omissions Cover?

Depending on the insurance company you sign with, an E&O will cover the court charges and even settlement claims. There is always a limit to the cover depending on the limit you had put while signing the contract.

Reasons why a Company need Errors & Omissions

Errors can occur any time; no matter how perfect your company may be. For this reason, there is need to be safe from future loses that may arise as a result of a slight error.

It is cheaper to pay the premiums of insurance than the huge court settlements that may be awarded against you in favor of the client.

With the peace of mind that you have insurance for errors and omissions, your confidence in service delivery will be boosted since you know you are covered. This works well for your business.

It is therefore very clear that Errors & Omissions is a viable insurance that truly help people.

Tax Liability

Tax Liability

Tax is a common term used all over the world. The successful running of states and governments is due to the collection of tax. But in the effort to collect taxes, not everybody is loyal in paying. Most people would try to find their way out of avoiding or evading tax.

Most citizens are liable to certain amount as taxation. So what is tax liability? Well, in a bid to answer this question, we will look at its definition and the related terms.

What is Tax Liability?

This is the amount an individual, group or a company owes to taxing authority. It is also referred to as tax obligation. It is a binding legal obligation of every citizen to pay tax liability. Failure to pay may result to imprisonment as stipulated in the law.

How is Tax Liability Calculated?

The tax liability is calculated by a taxing authority. The calculation is open and every citizen can calculate his/her tax liability. All the taxable events are multiplied by the given tax rate to get the tax liability. Taxable events are the sources of money that are bound to be taxed. They include, having sales, receiving or issuing a payroll, earning taxable income etc. The law is very clear on taxable events and everyone is expected to pay taxes.

The Importance of Paying Tax Liability

For a smooth running of local and national affairs, citizens have to adhere to the taxation rules. The number one importance of paying tax liability is to become a responsible citizen. It is the duty of every citizen to pay tax liabilities so as to enjoy the services offered by the government.

One of the most important reasons for paying tax liability is to promote development in a country. The reason why America is a great nation is because the citizens are loyal in paying taxes. It becomes easy for the government to initiate developmental projects. Infrastructures such as roads, hospitals, schools etc, have been made possible by the contributions from the taxpayers.

Tax evasion is a criminal offense punishable by both local and federal laws. Therefore, by paying taxes, an individual avoids a possible arrest and prosecution.

Avoiding Tax

While evading tax is a criminal offense, tax avoidance is legal and every citizen can lay strategy to minimize his/her taxation. There are several financial strategies that can help an individual in avoiding tax. But the bottom line is that the strategies have to be within constricts of the law so as to avoid tax evasion.

Therefore, it is clear that tax liability should be paid by every citizen so as to avoid prosecution but mostly for promoting local and national development.

Limited Liability Companies

What Is A Limited Liability Company?

A lot of business people opt to form a limited liability company or LLC instead of sole proprietorship, partnership or corporation. There are many benefits of having an LLC but there are also disadvantages.

What is a limited liability company?

An LLC is a business structure that is similar to a partnership but it has a legal protection like a corporation when it comes to personal assets of the owners or members. Unlike a corporation, forming an LLC is very simple and needs few requirements only but it also requires a fee when filing the documents.

Although a limited liability company has flexible management structure, few types of businesses cannot become an LLC. These businesses include banks and insurance companies. Since it has no restriction as to how the company will be managed, the number of members has no restrictions too. Members can be an individual, corporation, foreign entity or even another LLC.

What are the requirements in forming an LLC?

The Articles of Organization is the basic document that the law requires to those people who want to establish an LLC. This document is also referred as certificate of formation or certificate of organization. It includes basic information of the limited liability company such as business name and names of the members and their addresses. The address of the registered member who is designated to receive future lawsuit is also required to be indicated in the document. There may be other requirements depending on the state where the business will be established. Filing this document has a fee. Filing fee depends on the state but it usually ranges from $100 to $800.

Some states require the company to publish a simple notice of intent in a local newspaper that will be published several times for weeks. After completing this notice, an affidavit of publication should be passed to the LLC filing office. Once the affidavit is passed, the LLC is now established.

Rules in choosing a name for the LLC

Just like the other companies, an LLC is not allowed to be named similar to other LLCs. This can be checked with the LLC filing office. The name should also have a designator like Limited Liability Company, Limited Company, and abbreviations such as LLC, L.L.C., and Ltd. Liability Co.

It is also not allowed to include words such as Bank, Insurance, Corporation or name of a city. The name should also not violate any company trademark. There may be other requirements depending on the state so it is best to ask the LLC filing office for specific requirements.

The LLC Operating Agreement

An LLC Operating Agreement is not required by law but it is better if the company has one. This document sets the rules within the company such as ownership, members’ rights and percentage interest, members’ voting power and how to handle profits and losses. This is the document that tells how the company is managed and can be used in future legal dealings of the limited liability company.


Limitation Of Liability

What Is Limited Liability?

Are business issues ever truly divisible from legal issues? Many sales people itching to get a contract signed have suggested that my job as the lawyer is merely to advise a company on the “legal issues” in an agreement. Put another way, they want me to see no evil in the provisions they have deemed “business issues” and restrict my review to isolated “legal matters”. This is difficult because business and legal issues are often intertwined (and I am not a girl who can just close my eyes and pretend not to see glaring issues).

For instance, a limitation of liability clause, sometimes a contentious issue in a contract, can be classified as both a business and a legal issue. A limitation of liability clause sets out the maximum financial responsibility a party will incur if a breach of contract occurs. Properly drafted, and where enforceable, it provides protection and is useful for evaluating project risk. Typically, neither party is liable beyond the contract price, and neither should bear responsibility for damages not directly related to the breach. Of course, there are some items that should be excluded from the limitation of liability. Indemnification, or protection from third party claims, is typically excepted out of a limitation of liability clause, and often breaches of representations and warranties are, too.

Because a limitation of liability clause involves dollar figures, some business people view it purely as a business issue, a deal point to be negotiated and mentioned in the contract. Surely, the ultimate decision as to how much liability to bear is a business risk to be determined by the responsible party. However, the effect of the clause, and particularly its relationship to an indemnification or warranty section, needs to be viewed in the context of the entire contract and seen in light of both the business and the legal consequences of the language.

Commercial General Liability – Who is an insured?

  1. Named Insureds
  2. Individual including the spouse. As an individual you are covered for the conduct of any business of which you are the sole owner.
  3. Partnership or Joint Venture. Includes partners, members and their spouses. Coverage is limited to the conduct of your business.
  4. Limited Liability Company. Includes members and managers. Coverage for members is limited to the conduct of their business and coverage for managers is limited in respect to their duties only.
  5. Includes executive officers, directors and stockholders. For Executive officers and directors, coverage is limited to their duties. For stockholders, coverage is limited to their liability as stockholders only.
  6. Includes trustees. Coverage is limited to their duties as trustees only.
  7. Others
  8. Employees and volunteer workers, other than executive officers of corporation and managers of Limited Liability Company. Coverage is limited to acts within the scope of their employment or while performing duties related to the conduct of your business.
  9. Persons other than employees and volunteer workers. Coverage is limited to while acting as your real estate manager.
  10. Any person with temporary custody of your property if you die. Coverage is limited to liability arising out of maintenance or use of that property.
  11. Your legal representative if you die. Coverage is limited in respect to their



No рerson or organization is an insured with respect to the сonduсt of anу current or рast рartnershiр, joint venture or limited liability сomрanу not shown as a Named Insured in the Declarations of the policy.

Note that emрloуees, volunteer workers, рersons other than emрloуees are defined in your рoliсу language and should be reviewed with уour agent.