Business owners need to protect their companies with liability insurance policies. If you own a business, it’s essential to be aware of the different types of coverage available and how they can reduce some of your risks.
Even if you’ve worked hard to build up your business, an unexpected illness or injury could leave you unable to run things while also leaving some costly bills on the table. Protecting against potential issues will help ensure that your company won’t go under due to events beyond your control.
General Liability Insurance
General liability insurance policy covers the costs of legal liabilities associated with incidents related to running a business — including damage caused by customers, accidents on company premises (including slips and falls), and injuries suffered on the job.
Depending upon the type of business you have, your general liability policy may cover any number of different kinds of incidents that could happen around or to your business property. It’s important to read carefully to understand exactly what is covered by your policy.
Product Liability Insurance
If you manufacture or distribute products in addition to providing services, then your company needs product liability insurance. Product liability protects you from claims made by customers who believe that your product was defective in some way, including products like food and clothing and items like toys or batteries.
There is nothing illegal about making or selling a poorly-designed product– but a product liability claim can cause a lot of damage to a business’s finances. Suppose a customer is injured due to your shoddy workmanship or an otherwise faulty product.
In that case, they may decide to sue the manufacturer — and your product liability insurance policy will handle that. You could also face fines from regulators if you’ve been accused of selling a defective product.
Professional Liability Insurance
If you don’t offer physical products or services, your company will need professional liability insurance to protect you from similar claims. Some professions are prone to these types of claims, including doctors and lawyers.
Professionals who hold themselves out to the public may be accused of providing negligent service or given false information.
Product liability includes problems like medical malpractice, which happens when a doctor is sued for providing negligent care to a patient injured or killed. Suppose you are being sued for negligence.
Your professional liability insurance will work with your general liability policy to cover the costs associated with defending yourself in court.
Commercial Property Insurance
While your general liability policy will cover damage to your personal property and other costs related to a lawsuit, it won’t help you if your business equipment or storefront is damaged. You’ll need commercial property insurance for that.
Commercial property insurance provides coverage for the cost of repairing or replacing damaged items in your company’s inventory, as well as lost income from a lost business. A fire in a commercial building is an obvious example of when this kind of insurance would become necessary.
Workers Compensation Insurance
If you hire any type of hourly or salaried employees, then your company needs to provide workers’ compensation insurance to protect them from injuries on the job. Doing so can be especially important if younger employees work for your business, as they are more likely to be injured than older workers.
Workers’ compensation is different from general liability insurance in that it covers the medical expenses and lost wages of an employee who has been hurt at work.
Business insurance is vital for every business to protect themselves from various scenarios that could negatively affect them. Companies should use a business insurance comparison tool to find the best coverage for them.
Also, business owners should read their policies carefully to know exactly what is covered under each type of insurance.