What You Should Know About Business Liability Insurance
Every entrepreneur must be aware of every angle in their business
. Not just the operations, finance and marketing side but also the legal matters involved. Whether you have a small business, medium-sized or a large company, it is imperative to have business liability insurance.
What is business liability insurance? It is a type of insurance that protects a business if in case there is a formal lawsuit or third party claim pertaining to the business or the owner of the business itself in reference to the same. All expenses regarding legal defense is being covered by the insurance and personal contribution of the owner beyond the business is lessened. There are three types of business liability insurance: general liability insurance, professional liability insurance and product liability insurance.
For instance, you are a contractor offering home remodeling services. It is a pre-requisite that before you are allowed to open your firm, the state that you are in requires that you purchase a business liability insurance. Other than that, potential clients will first look if your firm is insured to be on the secure side - in case an accident happens, there is an insurance policy to turn to in time of need.
The government is more inclined to issue contracts to private firms that are insured. Homeowners are keen on who they want to work in their homes. They need contractors who can pay up if there will be an unfortunate event.
The insurance policy is different from one business to another. Depending upon your needs, the insurance company or its broker will give you a quote and discuss with you what type of insurance is necessary for your business. They will also give you full details about the risks in your business and how they will assist you if ever the time comes.
Here is another example:
An IT firm pays less insurance premiums for their employees as compared to a home remodeling firm. The former keeps his employees inside the office 8 hours daily - accident risk is very minimal. The latter, on the other hand, have workers that climbs up and down the ladder, handles big equipments and walks on roofs. Common accidents like falling debris on unsuspecting passers by is not a cliche. In fact, it happens in real life. When things go wrong, the injured party will sue the homeowner. The homeowner will then turn to the contractor. If the contractor has a business liability insurance, the injured party will be compensated justly.
Business assets can also be insured like the company car, the building your business is in, computers and other equipments that are of value to the business. Just remember that insurance is there to help you when you need it most. If you dont have insurance and trouble comes your way, are you prepared to pay a big amount of cash up to the extent that you can go bankrupt? It is better to be safe than sorry.
by: Shane Hester