So You Don’t Think You Need Liability Insurance, Hmm?

Liability coverage protects the general assets of your company in the unfortunate event of damages to one of your customer’s property or personal injury. An unhappy possibility (or, probability) are the litigation costs associated with the damage or injury. Of course, there are maximum payouts on any claim, but if you don’t have the additional coverage to increase your protection, it could cost you a lot of money.

To illustrate why your business needs liability insurance, let’s pretend for a moment that you are the owner of this towing company:

This is a true story, but some details have been altered to preserve anonymity. 




In September 2017, plaintiff XXX, 19, a college student and part-time furniture mover,  was driving his motorcycle southbound on Plainfield Road. YYY was operating a tow truck for TowCo. The tow truck was perpendicular in the roadway and taking up both northbound lanes and the outside southbound lane. XXX drove into the inner southbound lane in an attempt to go around the truck. At the same time, YYY began to back the truck into a nearby driveway in order to pick up a disabled vehicle, and XXX drove into the back of  the tow truck. 

XXX claimed injuries to his abdomen, chest, ribs, lungs, diaphragm, spleen, liver, kidney, arm, neck, knee and back. XXX remained in hospital for 2 months and endured 14 surgeries, the last of which occurred in August  2020.

XXX sued YYY alleging negligence, saying that YYY cut off his lane of travel and failed to check for traffic on the roadway before backing into the driveway. XXX also sued TowCo for vicarious liability. XXX’s counsel contended that even though XXX had enough time to stop, XXX was not obligated to do so since YYY gave no warning that he was backing into the driveway. 

XXX underwent post-surgical physical therapy and claimed future treatment, though the exact extent of his future care is not certain. XXX never returned to work and was  unable to complete his college degree. He had enjoyed playing pickup soccer games,  but said he is now unable to play because of his injuries. 

XXX sought recovery of past and future medical expenses and past and future lost earnings. He also sought damages for past physical pain and suffering, past mental anguish and distress, disability and inconvenience, impairment of the normal enjoyment of life, and future pain and suffering, disability and inconvenience. His mother also filed a derivative claim. 


The defense did not greatly dispute damages. 


Derivative Claim


A litigation claim brought by a holder of ownership interests in an entity (such as a stockholder in a corporation or a member in a limited liability company) on behalf of the entity against the entity’s management or board of directors typically alleging breach of fiduciary duty, fraud or mismanagement. 




The jury found that both drivers were negligent and that the negligence of each of them caused injury to XXX. The jury assigned 51 percent liability to YYY and 49 percent liability to XXX. 

The jury determined that XXX was entitled to damages of $4,602,880, and that his mother was entitled to damages of $75,000 for a total of $4,677,880. However, the award was reduced to $2,385,718.80 to reflect the comparative negligence finding.

You’ve worked hard to build the business of your dreams. Don’t let one accident turn it into a nightmare. Make sure you protect it with our General Liability Insurance products. It’s a crucial step in protecting your business and it’s more affordable than you might think.