Liability Insurance Policies That Will Protect Your Small Business
Being a small business owner has its share of perks, like being your own boss.
But owning and running a small business comes with certain risks, too.
The likelihood of not generating enough revenue will hang over your head. The same goes for being on the receiving end of a liability claim.
A liability claim can be such a pain in a world where anybody can file a lawsuit against anyone.
A customer, employee, client, or member of the public can file a liability claim against a small business.
For many small businesses, a liability claim could mean closing down.
After all, the costs of a liability claim can run up to hundreds of thousands of dollars. Some cases could even reach millions, which is a nightmare by any standard.
Since they have to pay for such claims out of pocket, a shutdown is always a possibility.
But liability coverage for small busiknownesses can help you avoid all that. With liability coverage, you have a much better chance of saving your business.
Let's look at general liability insurance and other types of liability protection.
General Liability Insurance Policy
Your small business can use the protection that general liability insurance can provide.
We also know general liability insurance as business liability insurance. Its coverage includes:
Was someone injured within your business premises and filed a liability claim?
Your general liability insurance will cover that person's medical expenses, among other things.
Are you a contractor working on commercial or residential projects? A general liability insurance policy will serve you well.
It will cover any intentional or accidental property damage your workers cause.
So, if a worker drops a hammer and damages a parked car, general liability coverage will take care of that.
The same thing goes if one of your electricians causes a fire in a client's house.
Slandering a competitor is never good for business, especially if you can get sued for it.
Speaking ill of a competitor can give rise to a reputational harm claim.
All a competitor has to do is claim financial losses after you harmed their reputation.
General liability insurance also covers reputational harm.
So, your policy will pay for legal expenses and any settlement the court sees fit.
Professional Liability Insurance Coverage
Do you provide professional advice and services? A professional liability insurance policy would be more appropriate for your business.
It also known this type of liability coverage as errors and omissions insurance.
Professional liability insurance protects professionals from claims of malpractice or negligence.
Doctors, lawyers, engineers, architects, and dentists can use this type of liability coverage. After all, even the most highly trained and supremely educated experts can commit mistakes.
A lawyer could fail to submit documents to the court on time. His client could sue him for negligence if they lose the case because of that mistake.
An accountant could also face a professional liability claim because of errors in the books. That will be a sure thing if those errors create a financial mess for a client.
There is no doubt that a professional liability claim from a client will hit your business hard.
Without professional liability coverage, you will be paying for everything out of pocket.
Get professional liability insurance as soon as possible to avoid that situation.
Worker’s Compensation Insurance
Laws that cover worker’s compensation insurance may differ from one state to another.
Still, their goal is to compensate workers who suffer a work-related injury or illness.
If you don’t have worker’s compensation, your workers can hold you liable if they hurt themselves at work.
Avoid a lawsuit by getting worker’s compensation insurance.
With worker's comp, you can:
Provide injured or ill employees with compensation for missed wages
Provide disability benefits for workers rendered disabled by work-related injury or sickness
Pay for funeral costs and death benefits for employees who lose their lives on the job.
Cover ongoing care costs like physical therapy
Every small business is bound to face many challenges while in operation. Fortunately, you can prepare for some of them, liability claims included.
Your business has a good chance of continuing operations despite a liability claim. Get the right liability insurance policy, and you will have peace of mind.
If you're purchasing liability insurance, talk to several insurance agents. Get quotes from different providers so you can compare rates. That way, you can get the best liability insurance policy for your needs.
You can only hope that no one files a liability claim against you.
Better yet, prepare for the financial repercussions should a liability claim come along.