- General liability coverage provides insurance protection for businesses against any claims involving property damage, personal injury or false advertising, according to Small Business Solutions, a small business resource site. Policy coverage also requires insurers to pay any legal costs resulting from lawsuits or liability claims; however, claims associated with punitive charges are usuallly not covered by general liability coverage. A typical policy identifies the maximum amount of coverage provided within a particular policy period, as well as the maximum amounts allotted per occurrence.
- Property damage and personal injury costs can run in the hundreds of thousands in worst case scenarios. Court costs, building repairs and impending medical bills for those injured make insurance coverage a valid necessity, as one major event can quickly place a business in bankruptcy court. According to the Independent Food & Beverage Insurance Brokers, Inc., commercial general liability coverage protects businesses in cases where goods or products cause harm--be it personal injury or property damage--to the customer. Injuries taking place within the business itself are also covered under a general liability policy. Coverage provided for false advertising claims or circumstances where another company or an individual files slander charges can also protect businesses from possible costly litigation expenses.
- Professional liability insurance coverage can benefit businesses as well as independent professionals, independent contractors or employees within a business, according to InsurePro, an insurance information reference site. Also referred to as Errors and Omissions insurance, this type of coverages applies in situations where mistakes, negligence or errors in judgment result in a lawsuit against a business or individual. Professional liability insurance covers legal fees as well as any costs associated with judgments made against a business or individual. Much like general liability insurance, plan coverage pays out according to a maximum amount per incident and per policy period.
- Umbrella liability insurance acts as another form of general liability insurance under certain circumstances. In cases where costs from a lawsuit exceed a general policy's coverage, umbrella insurance can pick up where the standard liability policy leaves off, according to Business Insurance Now, a business insurance resource site. Any required payments exceeding the maximum amounts listed on a standard plan could be paid by an umbrella policy. In effect, an umbrella policy provides added protection when purchased along with a commercial or general liability plan, though this type of protection does not extend coverage limits for professional liability coverage plans.
- Liability coverage needs can vary depending on the type of business and the location of the business, according to Small Business Solutions. A business that works with heavy machinery or toxic substances may require more liability coverage than a clothing store. Businesses with low risk potential can purchase general liability insurance as part of a business-owner's policy plan, which combines property and liability coverage into a single policy. Businesses with a high risk potential may want to purchase a separate commercial liability policy to ensure sufficient coverage. In terms of professional liability coverage, these plans require a separate policy apart from commercial plans.