Liability Coverage in Economic Downturns
For many businesses, change is an intelligent way of reacting to an economic crisis. It allows you to explore new customer bases and offer additional products or services. While expanding in either of these ways can revolutionize your business and keep you afloat in tough times, it could also expose you to additional liability you had not dealt with before.
When you begin to step into new lines of products or services, you will inevitably face a learning curve, which puts you at a larger risk of facing product liability claims. You may want to consider purchasing additional lines of coverage to protect yourself, as your surplus lines insurance policy may only cover claims arising from one particular product.
By the same token, shifting or expanding your customer base may open you up to class action lawsuits. New markets may react differently to product failure. Thus, it is vital to be covered for potential liabilities resulting from a change in your business.
An economic downturn can be a turbulent time for businesses in every sector, worldwide. Sinking revenues and economic uncertainty can exacerbate the frequency of lawsuits in our already litigious society, and even companies that successfully weather economic downturns relatively unscathed can still face long-term risks.