If you’re thinking about starting a business or have recently started one, you know there are plenty of things to do and consider. Some examples include hiring employees, attracting customers, and managing your finances.
While these are essential priorities, it’s crucial not to overlook the importance of protecting your business with the right insurance coverage at an adequate level. Without it, your business and potentially, you, personally, could experience significant financial loss.
In this blog, I’ll explain Business Liability insurance and why it’s critical to secure.
Imagine this: You’ve finally started your dream business and are off to a successful start. One day, a customer slips and falls on your premises and is injured. Does your business have enough money to defend itself against a lawsuit and/or pay the party damages for his/her injuries? It’s imperative that you have Business Liability insurance to protect yourself.
What’s Business Liability insurance?
Business Liability insurance provides financial protection to businesses in the event of claims made against them for property damages, bodily injuries, and other types of injuries caused to others. Claims could arise from accidents on or off the business premises, product defects, errors in services provided, or even advertising liabilities.
There are different types of Business Liability insurance products. It’s important to understand the difference between the types of coverages available and select the coverage(s) that best fit your business risks.
•General Liability
This standard commercial coverage protects your business against common risks such as bodily injury, property damage, and personal and advertising injury claims.
•Professional Liability
This is also known as errors and omissions (E&O) insurance. It’s a specialized form of insurance that protects financial, insurance, real estate, and other types of professionals against claims of negligence or errors in your work that lead to client injuries or losses. It’s often paired with General Liability insurance.
•Product Liability
If your business manufactures or sells products, this specialized coverage protects against claims from third-parties arising out of how your product was designed, manufactured, marketed, or used. It’s also often paired with General Liability insurance.
•Cyber Liability
This newer, specialized coverage protects your business from cyber threats. It covers expenses related to data breaches, cyberattacks, and other security incidents. It’s often paired with General Liability and other types of insurance.
Ways you and your business benefit from liability insurance
As a new business owner, you may be tempted to cut corners on insurance to save money. Doing so can put you and your business and its reputation at risk. Insurance provides these protections:
•Legal
Liability insurance can provide financial assistance for legal fees, settlements, and judgments against your business. Without insurance, costs of litigation, alone, could potentially bankrupt your business.
•Financial
Accidents happen, and even the most diligent businesses can experience them. Liability insurance ensures your business can survive the financial impact of claims or damages.
•Asset
Personal assets may be at risk if your business faces legal action. Liability insurance helps separate your personal finances from your business liabilities, protecting your savings, home, and other personal property.
Business Liability insurance isn’t just another expense; it's a critical investment in your business's long-term success and sustainability. In the ever-changing business landscape, talk to your independent insurance agent to ensure you have sufficient coverage that best suits your business.
This article is intended for general educational and illustrative purposes only and should not be construed to communicate legal or professional advice. Further, this article is not an offer to sell insurance. Please consult with your licensed insurance agent for specific coverage details and your insurance eligibility. All policies are subject to the terms, conditions, limitations, definitions, and exclusions contained therein.
