Insurance for Small Business
A single large liability claim can wipe out a small business and irretrievably damage a brand built up over the years. Small businesses face a variety of claims based on the business operations’ nature, size, and location.
Don’t be scared, but nearly $100 billion worth of lawsuits are filed against small businesses every year in this country. The nature of your business determines the most likely type of litigation. Are you at risk?
We live in a lawsuit-happy society. No matter how careful you are, there is always the possibility your business will be sued. If a court rules against you, you could lose everything, including your personal assets. Therefore, every business owner should consider Small Business Liability Insurance.
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What is Small Business Liability Insurance
No one expects a disaster to strike their business. But every small business is vulnerable to liabilities, like a major catastrophe or a massive lawsuit. This type of coverage is tailored to the risk of every specific small business.
Although a small business employs less than 500 people, The Office of Advocacy of the US Small Business Administration (SBA) reported 31.7 million small businesses in the US at last year’s count. But, the following percentage matters most: Small businesses create 1.6 million jobs annually and are significant drivers of economic growth.
However, 75% of small business owners are concerned about being the target of frivolous or unfair lawsuits. They pay nearly $20 million from their pockets in tort liability costs. In our litigious society, almost 52% of all civil lawsuits target small businesses annually.
Typical Liability Claims
In general, claims are of three main types. They are filed by another business, a customer, or an employee. Commonly filed claims include:
- Breach of contract
- Slip and fall accidents
- Auto accidents
Premises liability - Discrimination on various grounds (against employees or customers)
- Harassment
- Employee injury/illness
- Intellectual property rights
The way out is to ensure you have the right coverage against property damage and liability claims. Protect yourself and your business against the high cost of meeting a claim.
Unhappy clients file a large part of lawsuits. Theft, damage by weather events, and reputational harm are other areas where you could sustain losses.
Coverages you Need
In general, claims are of three main types. They are filed by another business, a customer, or an employee. Commonly filed claims include:
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General liability Insurance
As a business owner, you may have to deal with cases of people (employees, clients, or others) claiming property or bodily damage as a result of your operations. The liability coverage helps take care of legal fees and damages.
General Liability insurance is sometimes also referred to as commercial liability insurance or small business insurance. It covers you in case of property damage, medical expenses due to bodily injury, and electronic data liability. A personal and advertising injury can be generally covered by this policy as well.
It is a fairly comprehensive policy meant to protect contractors. However, some contractors will opt for extensions or additional policies offering broader coverage. Make sure to discuss your extra coverage options with your insurance provider. Avoid underinsurance. We can help.
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Commercial Building Insurance
This is especially important if the building you use for your business belongs to you. Even if it doesn’t, this insurance provides coverage for your business’s equipment, tools, and inventory. With this, you are protected from losses resulting from vandalism, fire, theft, and so on. It may also cover the costs of business interruptions and loss of income.
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Auto liability
If you use vehicles for your business, you will need a Commercial Auto Policy to protect them from damage. Personal auto insurance cannot substitute for this policy.
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Data Breach Policy
It protects against loss that could result from a breach of client or employee information in your business’s possession.
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Worker’s Compensation
This coverage takes care of medical costs and lost wages when your employee gets injured or ill due to the nature of their job. Laws in most states make it compulsory for business owners.
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Errors and Omissions Insurance
This protects you against claims of improperly rendering or failing to render professional services. This insurance variant also referred to as professional liability insurance, is recommended for professional firms such as accounting and consultancy firms.
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Directors and Officers Insurance
This coverage protects against losses that could result from the actions of a company’s directors and officers, such as lawsuits.
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Umbrella insurance Policies
They are essential because they cover unforeseen events. Think about some of the devastating losses you’ve heard about recently and the large settlements awarded in courts these days. These losses could exceed your primary insurance coverage.
It’s very affordable and could save your business in certain instances. With an umbrella policy from us, you can get up to $10 million of liability protection over and above the limits of other insurance policies you have for your business.
Beating a Liability Claim
A property damage claim or liability claim can disrupt your business, damage your reputation and even shut down your enterprise for good. It’s crucial to develop a robust strategy to handle these claims your business can encounter.
- Understand and analyze your risks: Some businesses, especially those related to the construction industry, are inherently more hazardous than others. For instance, a roofing business would have to invest in higher Workers’ Compensation coverage than a carpet cleaning business.
- Incorporate: Forming an LLC helps to limit your liability. It keeps your personal assets safe in the event of a large claim. Your personal and business finances remain separate when you incorporate your business.
- Maintain accurate records: Ensure that you keep meticulous records of every contract you sign, all communication with the customer, meetings, the services agreed upon, time, and date and place.
- Get the right insurance coverage: Invest time, effort, and money in getting the right coverage. It’s wiser to be over- rather than under-insured. Research the types of policies and coverage available to a business like yours. A reliable, reputed, and well-established insurance company or broker can give you the right advice and assistance.
Get your Small Business Liability Insurance quotes today and avoid unnecessary risks!
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