Important change may affect business owners� insurance

Business owners carry commercial insurance policies to protect their financial interests in their property and to cover their liability arising out their business operations. One of the important liabilities that is covered is in the event that a business is sued. The typical commercial insurance policy includes a clause called �duty to defend,� which means the insurance company is required to defend the business if it is sued and it will pay the associated legal costs. However, some commercial policies are being changed to require businesses to repay legal defense costs if the insurer later determines a claim is not covered.

How will you know if your insurance company will require you to repay legal costs? Read your policy or talk to your agent , broker, or with the insurer. Insurers may be adding the clause to new policies or to renewing policies, so it�s important to know what your policy says.

It�s also important that you promptly report lawsuits to your insurance company. Reporting this information to the insurer too late can impede the insurer�s ability to defend your business against the lawsuit. 

More information:

• Read more about the duty to defend and repaying legal costs.
• Who needs business insurance?  
• Things to consider before buying business insurance.

Questions? Contact our consumer advocates online or at 1-800-562-6900.