According to the International Risk Management Institute, a contingent liability insurance policy refers to coverage that protects the insured against losses to a third party who is contractually bonded to the business in some capacity.
Contingent Liability Coverage
Contingent liability insurance provides custom solutions for identifying risks during the day-to-day operations of a business or amid mergers and acquisitions. These are carefully negotiated among all parties involved. They cover a large variety of issues relating to pension, employment, intellectual property infringement claims, environmental and litigation exposures.
Occupational insurance is a policy that provides contingent liability coverage to employees who aren’t covered by the conventional workers’ compensation policy. Contingent liability insurance also enables the business to:
- Eliminate the need for escrow services
- Minimize price negotiations and delays by alleviating identified risks
- Remove uncertainty from a merger or acquisition
- Replace or act as an indemnity
- Enable a liquidator to release proceeds
- Minimize uncertain expenses or accounting positions
Determining the risks your business faces to install the best policy option can be complicated. A qualified independent agent can assist in the legwork of acquiring the most appropriate policy that meets your business needs.
For a business owner, having the right contingent liability insurance policy coverage when you need it can shield you against massive financial losses.