Business
Commercial liability for service providers: the basics
Which risks actually matter and how to choose coverage that fits your business model.
Service providers can be liable for small mistakes, especially when clients, data, or third-party property is involved. Commercial liability insurance protects you from the financial impact. This article explains what to focus on and which questions truly determine the right coverage.
1. What does commercial liability cover?
Commercial liability covers damage to third parties caused by your work. Typical cases are bodily injury and property damage, often including resulting financial losses.
Pure financial losses may require additional cover depending on your industry.
- Bodily injury and property damage
- Consequential financial loss
- Defense against unjustified claims
2. Industry-specific risks
Service providers often handle sensitive data or work in client environments. Risk varies widely by activity.
Standard solutions are not always enough.
- IT providers: data loss and downtime
- Consultants: errors in recommendations
- Trades: property damage at the client site
3. Choosing the right limit
Your limit should match project size and client risk. Working with larger clients often requires higher limits.
Higher limits are often only slightly more expensive.
- Review client size and contract volume
- Check liability requirements in contracts
- Don’t choose limits that are too low
4. Deductibles and exclusions
A deductible that is too high can hurt in a claim, but it lowers the premium.
Exclusions must be clearly understood.
- Set a realistic deductible
- Check activity-related exclusions
- Watch for contractual liability extensions
5. Proof of insurance and client requirements
Many clients require an up-to-date certificate of insurance. The right policy can be a competitive advantage.
Clear coverages signal professionalism and trust.
- Provide a certificate of insurance
- Communicate limits transparently
- Review contract requirements early
Commercial liability checklist
Conclusion
A strong commercial liability policy protects you financially and builds client trust. Aligning the policy with your business model increases security and professionalism.