Tortfeasors & Insurance

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Launching a business is a long but rewarding journey. In the early days, business owners spend a lot of time focusing on making everything right for their customers and marking tasks off their checklist to see success. This is also the time when they buy business insurance to protect themselves in the event of a lawsuit or loss. Most of the time, business owners buy insurance with no plans of using it. But, accidents and losses do happen, often resulting in lawsuits. Sometimes businesses are referred to as a tortfeasor depending on the incident.

What is Tortfeasor?

A little-known term in the insurance industry is “tortfeasor.” A tortfeasor is a party that causes harm to another party by committing a tort. The injured party has the right to press charges against a tortfeasor for payment of the damages caused. Tortfeasors can be individuals or businesses.

What is a tort?

A tort is an act or exclusion that causes harm to another party and results in legal liability. There are three types of torts:

  • Strict Liability: These occur when there is no negligence or intentional act, but the tortfeasor is still responsible for the injury.
  • Intentional: These occur when the tortfeasor knows and understand their actions can result in harm.
  • Negligence: These occur when the tortfeasor doesn’t use reasonable care.

What is considered harm?

There are several types of liabilities a business can be held responsible for. Below are three types and scenarios which may apply to businesses:

  • Negligence: When a patron slips and falls, injuring themselves at your business, they can file a lawsuit claiming your business was negligent and responsible for lost wages, pain and suffering, and medical expenses.
  • Fraud: A third-party may believe that your marketing promises are false and accuse your business of fraud. The lawsuit can hold you responsible for damages caused by false promises.
  • Faulty products: If your customers find your products to be faulty in use, they can file a lawsuit. Lawsuit demands can include medical expenses from injuries, pain, and suffering, and even lost revenue if they are a business.

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What is the Difference between Tortfeasor, plaintiff, and defendant?

In the context of liability insurance and potential liability judgments, the plaintiff is the claimant, the person or party that has suffered a loss and is filing for legal damages due to being injured or harmed.

The terms tortfeasor and defendant are commonly used synonymously to denote the liable person or party, or the one who is being litigated for charges. Although the term tortfeasor and defendant are often used interchangeably, there is a variance between these two words. The defendant is the common term used to describe the person who carries out a harmful, illegal, or immoral act. On the other hand, the tortfeasor is more precise and it applies to those who are accountable for committing a tort or a wrongful act that leads to legal liabilities.

Here’s a basic summary of all three terms:

  1. Defendant – it used to denote all three kinds of wrong legal actions. In events of crime, breach of contract, and tort, the person who is responsible for the act or causing harm can be called defendant.
  2. Tortfeasor – it is only used to represent a person committing a tort. Regardless of whether the tort is intentional, inherent, or caused by negligence, the tortfeasor may be liable for damages to the plaintiff, the claimant who was damaged by the tort.
  3. Plaintiff – also called a claimant, is the person or entity filing for damages. In most cases, the plaintiff or claimant is seeking compensation for a loss caused by the defendant or tortfeasor, such as a financial loss or pain and suffering.

Small Business Insurance

Having the right small business insurance can help to protect your business and reduce the impact of lawsuits in numerous scenarios. Depending on your size, industry, and operations, the right coverages for your company may differ. CoverWallet’s Advice tool and licensed experts can help you to determine the best coverage and get your business protected.

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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