First Party Liability Insurance

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The Sides of Liability Insurance

There is a famous saying that states there are two sides to every story. That is because more than one person is usually involved in an incident that warrants a story. The same is true when it comes to insurance. There are three parties defined in every insurance policy.

  • First Party: The first party is the insured; in this case your business, that purchased the policy.
  • Second Party: The second party is the insurance company.
  • Third Party: The third party is the individual or organization filing a claim against your business.

Small business owners have a variety of reasons for buying insurance. Some buy it because they have to. Others buy it to protect themselves from lawsuits. And others buy it to protect their property. Not every insurance claim includes all three parties. Some only include your business and the insurance company.

What is First Party Liability Insurance?

First party liability insurance covers your business for a loss you incur. The loss can result from a third-party, an outside force, or even yourself (if the cause is not considered illegal).

What policy types include first party liability insurance?

There are several types of business insurance policies that include first-party liability, such as:

  • Commercial Property: Commercial property insurance pays the insured (you) when a covered event damages your business property and you file a claim. The insurance carrier assesses the amount of damage and determines the amount it will cost to repair or rebuild before sending payment.
  • Cyber Liability: Cyber liability insurance pays your business costs associated with a data or cyber breach that compromises client information. These costs can include notifying clients, credit-monitoring, public relations, and expenses to settle cyber extortion or ransomware attacks.
  • Crime Liability: Businesses buy crime liability insurance to pay for losses resulting from theft or dishonesty. It can pay the costs to replace stolen property as well as repair property damage caused by a burglar.
  • Product Liability: One of the last things you want to worry about is your product failing in the market for faultiness. But, it does happen from time to time. The cost associated with product recalls is significant which is why product liability insurance is valuable to businesses. It pays for the costs to recall a product and adequately manage the publicity related to the recall.
  • Business Auto: Business or commercial auto insurance can include both first and third-party coverage. First party liability occurs when your business causes an accident that damages the business vehicle. The insurance company will pay you the costs associated with repairing the vehicle, minus your deductible.

In business, it is a good idea to protect your well-being in all directions. First party liability insurance helps keep your doors open even when you make a mistake from time to time.

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Business Insurance

Running a business is challenging enough without having to worry about lawsuits, employee injuries or property damage. Having the right insurance gives you the peace of mind to focus on what matters - running your business.

The coverage you need depends on the type of business you run. A restaurant owner needs to be covered against customers possibly getting food poisoning while an accountant needs to be covered against calculation errors. CoverWallet's intelligent assessment system will identify the insurance you need based on your specific business, get you a policy that fits your budget, and do it all in less time than you think.

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