Tag Archives: professional liability insurance

Liability Risks and Damages – How Safe is Your Small Business?

When it comes to running a small business, there are many mistakes that can be made and many people  you have to deal with on a daily basis. From customers to vendors and from employees to contractors, it is highly possible that one of them will be hurt or claim to have been hurt when on your property at any given time.

For this reason, having small business general liability insurance to cover you and your assets is something that is indeed important and should never be skimped on.

Below you will find out the types of small business general liability insurance you can choose from and what every business owner should know about them.

The Different Types of Small Business Insurance

There are many different types of small business general liability insurance to choose from, you just have to know your types and choose the one that best protects your business. You should talk to your insurance agent, so that he can help you find the right policy for you.

Professional Liability Insurance

Also known as errors and omissions insurance, professional liability insurance protects your small business against malpractice lawsuits if you offer services instead of products. According to the profession you are in, you might be required by the state to carry this type of small business liability anyway. If you are not required by law, you need to get a policy anyway to cover your business and your personal life as well. There is nothing that can damage your business more than being sued for negligence and malpractice.

General Liability Insurance

Any type of general liability coverage is recommended if you have a small business. This type of insurance policy covers your small business if you are sued for anything from negligence to slander. The types of suits it covers you against are listed below.

  • Bodily injury
  • Medical expenses
  • Property damage
  • Slander
  • Libel
  • The cost of defending against these types of suits, which can get very expensive
  • Settlement bonds
  • Appeals processes
  • Judgments

Having a general liability policy is the only way that you can protect yourself and your small business against the ever-increasing need that Americans have to sue someone for something on a daily basis.

Product Liability Insurance

If you run a business that sells products, then you are responsible for that product and any damages it might cause. This type of insurance protects against lawsuits if a product is defective and causes any type of harm. You need to choose the amount of insurance you need to buy according to the type of product you sell.

For example, you would not need as much product liability insurance for a small clothing store as you would a mom and pop grocery. Your insurance agent can help you choose the right type and amount of insurance for you according the type of product you are selling.

Commercial Property Insurance

Business property insurance covers you from damage that happens on your commercial property. You will want to have commercial liability insurance policies in place at all times, because you can never predict when a disaster will happen. Mother Nature has a mind of her own and weather is very unpredictable.

This type of insurance covers your commercial property from the following events:

  • Fire
  • Flood
  • Vandalism
  • Smoke
  • Wind
  • Hail storms
  • Civil disobedience

Business Insurance for Home Based Businesses

It is a myth that homeowner’s insurance policies cover a home based business. You will need a separate policy to cover anything in the home related to your business needs. It is possible to add a rider to your homeowner’s insurance, but it is not going to help you very much if something happens. You should take out a separate policy, so you know that you are covered no matter what happens. You will predominantly need general and professional liability insurance in the event that you are sued for any reason.

Why Do You Need these Insurance Policies?

Many people feel that they are better off just taking their chances than they are paying the often high rates for insurance policies for a small business. Taking these extra steps with your small business can help you if you are sued for any reason. While it might not ever happen, it is best to be safe instead of sorry. The insurance will do you no good, if you wait to purchase it after you are already being sued for whatever reason.

You need to realize that one simple mistake can cost your company millions or even throw you into bankruptcy, according to the number of people your mistake harms. With good insurance policies in place, you are assured the help that you need when you need it. It is better to have the insurance and never have to use it, than it is to not have the insurance and need it badly at some point. If you have the liability, insurance that you need, you can be sure that your property and your assets are well protected in the event that something happens.

These are just a few of the types of insurance policies that you might need for your small business. Whether you run a small business, a home based business, give service, or sell products, you need to protect yourself and your property from being sued. If you feel that you do not need liability insurance or are unsure of the best kind for you, contact an insurance agent to help you right away.