How Business Liability Insurance Works
If you operate a small business, you know how important it is to handle everything with importance, and to offer the best in quality and service. But you also know that no matter how hard you try to provide the best, customers can still claim that you’re at fault in a situation (even if you’re not).
Nearly 80% of companies in the US are set up as a sole proprietorship, or as a partnership. This kind of structure generally sets up a small business owner with a lot of risk… both in the company and personally. Business liability insurance covers your assets – both business and personal – from damage through lawsuits.
In the case of a lawsuit filed for individual or property damage, this type of insurance covers legal fees and damages. Business liability is a big problem for most small businesses, because they don’t understand it, and they don’t really know the risk of not having it.
Having a general liability policy is the rule of thumb – it provides the protection against things across the board, such as accusations and lawsuits against you for false marketing… to injury claims and damages to property. Many companies who invest in liability insurance choose only this type of policy.
If, however, a business is selling products, product liability insurance is key. A suit brought against a small business based on personal injury or property damage resulting from a defective product can easily put a business out for good… product liability insurance protects a business from that danger by covering the expenses in those situations.
The cost for a product liability policy varies. If the product you sell is low-risk (like book marks) then your policy would be much more inexpensive than a policy for a company that sells something that could feasibly harm people, such as curling irons or flat irons, which involve high heats close to a person’s body.
The most important thing is to evaluate the matter seriously, as you would anything else in your business, and check into the options available that can help minimize your risk.
