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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Small Business Insurance

Having the right small business insurance can help to protect your business and reduce the impact of lawsuits in a number of 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.