April 14, 2015

Claim vs. Suit: What Is The Difference?

Signing work injury claim

Differences Between Claims and Suits

Investing in the right commercial insurance policies can help to ensure that you are protected from any peril. From bodily injury accidents to personal and advertising injuries, knowing that your insurance policies will provide coverage can help to give you peace of mind. However, while most commercial insurance policies will confidently provide coverage for a suit, will they also provide coverage during a claim? Knowing the differences between a suit and claim will help to keep your business safe.

With typical general liability insurance policies, a suit is a civil proceeding that alleges damages due to property damage, bodily injury, or personal and advertising injury that will be covered by your insurance policy. It is important to keep in mind that a suit refers to civil action, not criminal action. In addition to a lawsuit, a suit can also refer to an arbitration proceeding, or another type of alternate dispute resolution (ADR), in which damages are claimed against your company.

Most general liability insurance policies do not define the word claim, but the term typically refers to a demand for damages. Any lawsuit that damages property will qualify as a claim, not a suit. It is important to keep in mind that there are many liability claims that are not lawsuits, but are just a request for damages. These requests are started by a demand letter from the plaintiff or their attorney, which will summarize the complaint against your company. The letter will also include a specific amount of money that the plaintiff is looking for.

To ensure that you have the right amount of commercial insurance to protect your business from both suits and claims, contact Brewer-Lloyd Insurance Group in Mesa, Arizona. We will work with you to ensure that you have the protection that your business deserves.