As business owners, you probably don’t like to think about what could go wrong – especially when it comes to getting sued. But it is something that can surely happen to any business – no matter the industry, size, or location. Business liability insurance, required in most states, is designed to protect your business assets in the unfortunate event you are sued.
Nowadays, with business lawsuits cluttering the courts, you will want to maintain a proper amount of business liability insurance to protect the venture you have worked so hard to build. It is highly possible your company can be sued for something it did or did not do; something that resulted in injury or property damage to someone else.
Business liability insurance will not only cover the cost of these damages, but also the legal feels and other costs pertaining to your defense in a lawsuit. We all know that the expenses of defending oneself against claims in court can be significant, regardless of whether or not the lawsuit has value.
What business liability insurance will not do is protect you against any claims arising from nonperformance of a contract, wrongful termination of employees, sexual harassment, or lawsuits to do with race or gender. Oftentimes, what is known as a surety bond is taken out as performance insurance, while employment and practices liability insurance (EPLI) protects your business against any employment-related claims, such as sexual harassment.
Many small businesses have a hard time figuring out exactly how much business liability insurance they need. While there are several guidelines to consider, there is no standard formula. Deciding upon the amount of business liability insurance to buy is a quite important task, considering the outrageous number of lawsuits that emerge every day. To help you figure the amount, you can refer to a recent liability settlement in an industry that is related to yours, or you could base the amount on your business’ total assets. Either way, discuss it with your business liability insurance agent. Also check for recommendations from your trade association.
There are some industries that specifically require a set amount of business liability insurance. For example, if you rent your business property, take a look at your lease, as it may require a set amount of liability. Upon doing that, purchase the business liability insurance you can reasonably afford, all the while remembering the cost of the insurance will be far less than the cost of a lawsuit.
- Protect Your Business
- What Kind of Business Liability Insurance Coverage Do You Need?
- What You Risk Without Business Liability Insurance
- The Basics on Business Liability Insurance
- Risk Evaluation
- What Else Can You Do to Minimize Disaster?
- Quick List of Questions to Ask About Business Liability Insurance