Small businesses are more likely to ignore the importance of business liability insurance. Although they take every precaution to protect their business from risks, such as taking out insurance on physical assets, such as buildings, stocks, and goods, they don’t consider the possibility of their business being sued. Due to the seriousness of the damage they can cause to the company’s reputation, finances, and survival, it is important to protect against all possible liabilities.
This article will explain the importance of different types of insurance policies for businesses.
Types and types of business liability insurance
Small business owners can protect their businesses with business liability insurance. This covers liabilities such as public liability, employer’s responsibility, professional liability, and product liability. The type of business you have will determine the insurance you need. Here are the top types of insurance that small businesses can choose from.
* General Liability: This insurance helps small businesses protect themselves from liability arising from property damage, injuries to employees, customers or the general public resulting from their operational negligence. This insurance covers you for medical expenses resulting from bodily injury to another person. You are also protected against damage to property of third parties.
Professional liability: If your profession is software consultant, plumber or chartered accountant, you could be subject to professional liability. Professional liability protects professionals against liability for loss of data, malpractice claims, breaches of confidence, accidental data loss, and inadvertent errors by employees. These cases are too expensive and insurance covers them.
Product liability: If an individual is injured because of a defective product you sold or manufactured, they can file a lawsuit against your company. Your business is protected from these liabilities through product liability. This protects you by handling all legalities and claiming for compensation.
The importance of business liability insurance
Your business is protected from many liabilities by purchasing business liability insurance. However, it is a good idea to verify the suitability of your insurance in terms of its coverage and the risks that are involved in your business. Let’s talk about its importance.
* Coverage against injuries, damages, and malicious claims: Your business’s liability insurance covers bodily injury that your business causes to customers, employees, or the general public.
You could also be held liable for damage to property if you cause damage to other property such as when your business moves inventory from/to your warehouse.
Personal injury cases can arise when an employee is hurt on the job. You are protected against liability if an employee is hurt while working for the company, such as in an accident. The insurance covers your business by covering the medical expenses incurred for the treatment of the injured person.
Unintentionally causing resentment through a business advertisement is another risk. A malicious advertisement brings forth litigation against your business. Insurance protects your company by paying the appropriate compensation to the injured party in the event of litigation. It also covers the costs of litigation.
* Legal fees, medical bills and legal fees: The business liability insurance covers the medical expenses incurred in treating the injured as well as the costs associated with litigation. In the event of your inability to attend court, the lawyer representing you would be there.
It is important to have business insurance in order to protect your company against different liabilities. However, it is important to select the right insurance policy. The right coverage and the right type should be chosen taking into consideration the risks associated with your business. Your business can be financially devastated if it has inadequate or excessive insurance coverage.
