Will general liability insurance cover claims of malicious prosecution? This term can apply to a variety of industries and in numerous situations that, at the end of the day, are very personal. If you believe you are facing this type of claim, let your insurance agent know. They will work with you to determine what level of negligence may be present. Here is a closer look at what this may mean for your business. 

Here’s a unique insight into this very unique liability, and how you should be prepared to address it through your liability benefits. 

What Does Malicious Prosecution Mean? 
Malicious prosecution is a term that may apply to certain personal liabilities that are not physical.  

For example, it is possible for a person to file a suit against a company if they believe the company’s previous legal actions were wrongful. Let’s say that a company like your own sues another company. You may claim that they defamed your business. And you may have all the information you think is necessary to prove your case. The courts might not agree though.  

In this case, the affected business might then try to file a lawsuit against your company for false accusations, or even libel or slander. They may try to obtain compensation for the losses they say they have sustained due to your actions. In essence, this is similar to a counter-suit. 

It sounds complex, but often this type of claim can fall under your general liability insurance. As a business, you need to know that your actions can be impactful beyond just your customer base. It is always important for you to work closely with your insurer to have compensation that protects you in case you make a mistake even when you are trying to do the right thing. 

What Happens With This Type of Claim? 
If you have general liability insurance, your insurer will work to help defend you. It will not provide you with any financial support, though, if you are intentionally responsible for the third party’s losses. However, it helps in most other cases. If the claim goes to court, for example, your insurer may provide legal representation for your business. You may also be able to get help with settlements and judgments made against your business. Still, most policies have limits on how much coverage is available. 

Malicious prosecution is an action that can cause financial harm to another organization or a person. However, they might in turn blame your business for the harm they sustained, and that’s where your liability benefits can come in handy. It is always important to work closely with your commercial insurance agent to avoid the ramifications of such situations.