Small business liability insurance protects your company’s financial interests if a third party files a formal lawsuit. The policy will cover your direct financial liabilities and legal defense expenses. There are three types of small business liability insurance policies:
- Professional liability insurance
- General liability insurance
- Product liability insurance
Understanding Small Business Liability Insurance
It’s not uncommon for small business owners to put their personal finances on the line if they face a business-related lawsuit. But how will you manage the operational expenses later if you win the case? That’s why small businesses benefit from this insurance policy. It protects your company’s assets. Most importantly, it pays for various legal obligations.
Suppose an employee sustains an injury while working at your store. Or maybe a customer gets injured because a heavy item accidentally fell on his head from the top shelf. You can’t expect them to pay for their medical expenses. A small business liability insurance policy can cover these expenses so that you don’t have to pay anything out of your pocket. It also covers your company’s legal defense cost, such as paying for legal settlements, punitive damages, or compensatory damages.
Cost of small business liability insurance
The cost of a small business liability insurance policy will vary according to your type of business. For example, a business that involves using heavy machineries like forklifts and cranes will get a higher coverage cost than a home-based business where you mainly operate online. This means high-risk businesses may need to pay a higher premium to get more coverage.
It is best to compare the terms and conditions of the policies before purchasing one. Talk to LIA Insurance Agency and see which policy suits your business. A small business may not require millions of dollars of coverage.