Looking for liability insurance or insurance for small business? In this article, we’ll go over some important elements of liability insurance for small businesses. The coverage you need depends on the nature of your business, but there are some broad areas of exposure you should be aware of. For example, you may need general liability, workers’ compensation, or professional liability insurance. While it’s easy to overlook these broad exposure areas, you must understand your specific risks. You can consult your insurance agent for advice.
Worker’s comp
Purchasing worker’s compensation insurance for small businesses is an essential step in protecting yourself and your employees. Without this insurance, you may face hefty medical bills, lost wages, time off, and even potential criminal charges if an employee sustains an injury on the job. Additionally, most states have strict laws about this type of insurance, so failing to comply could land your company in hot water. Here’s how to find a good policy:
When searching for worker’s compensation insurance for your small business, you can begin by contacting a licensed broker in your area. These brokers are often familiar with small business insurance policies and will be able to help you determine the correct coverage level. When comparing quotes, remember to consider your company’s estimated payroll and the type of business you’re running. Small businesses don’t make enough money to justify working with a traditional insurance agent, so they often won’t write policies for them.
General liability
If you’re running a small business, general liability insurance for small business is a necessity. Without it, you could be legally responsible for accidents on your premises, including broken toes. You may also be sued for copyright infringement, which can result in a $150,000 lawsuit. General liability insurance helps protect you from these situations and more. Below are some examples of situations where general liability insurance for small businesses is necessary.
General liability insurance protects your business from lawsuits for common third-party activities. Whether you provide services to clients or deliver products, this type of insurance protects you from expensive legal fees. For example, it pays for legal defense costs when you face lawsuits for libel or slander. General liability insurance for small businesses is a necessary part of many contracts and can keep you financially stable. When you start a small business, you’ll want to choose the right policy.
Professional liability
Professional liability insurance is a policy designed to protect businesses from lawsuits arising from negligence. These policies are specialized to protect specific professional services. Companies seeking to protect themselves from economic loss should consider purchasing professional liability insurance. Here are a few things to look for in a policy:
Cost. Premiums for professional liability insurance vary by industry, location, and claims history. However, an average policy costs $1700 per year. There are some ways to save money on professional liability insurance. One way to do this is to bundle other insurance policies into one. For example, a policy may save money by covering multiple risks or by allowing you to pay a lower premium if you opt for a high deductible. Another option is to use an insurance agent to add professional liability coverage to your current policy.
Professional liability insurance is also called errors and omissions insurance. This type of insurance protects businesses from lawsuits arising out of mistakes. Errors or omissions can occur while performing work for a client. The coverage includes legal fees, costs, and damages. However, it does not cover criminal prosecution. Therefore, it is highly recommended that you obtain professional liability insurance for your small business to ensure that you are protected in case of an error.
D&O
If you’re running a small business, you may need D&O insurance. Even though it’s usually more common for larger companies to purchase this type of insurance, many small businesses can get away without it, too. For example, if you’re not protected, a shareholder may sue you or your company for disappointing stock performance or worse. However, if you’re a private equity firm, you may need this type of insurance for your executives.
D&O insurance covers the costs of defending yourself or your business if you or one of your officers is accused of wrongdoing. This type of policy protects your company’s executives and helps it retain top talent. Most board members now expect their businesses to carry this type of insurance. Even small businesses that don’t have a lot of employees may want to carry it. It’s important to understand that directors and officers face many of the same risks as any other staff member. And because of this, they’re usually not covered by general liability policies. However, this type of insurance covers legal expenses for the directors, so your business must consider it.