Who Needs Business Liability Insurance?
Business liability insurance is a measure that all small business owners must take. In a world that is increasingly become competitive, use of manipulation and fraudulent methods to beat the competition can't be ruled out. However, when you protect your business with small business liability insurance, you are not just helping your business become successful, but you are also protecting your rights.
According to some studies it has been found that almost 80% of all businesses in the US are either run as a partnership or then, sole proprietorship. For most of the small business owners, these forms of business ownerships tend to put their business at a considerable risk, not to mention, increase their personal liabilities. However, if as a small business owner, if you'd like to protect your business and lead a peaceful personal life, then getting small business liability insurance becomes unavoidable.
In fact many business owners are under the misconception that a "limited liability company" or LLC or structuring their company as an incorporated will protect them from personal liability, therefore making the requirement of liability insurance redundant. However, that's not the case and these are the reasons why:
You may have become a personal guarantor on a loan
You may have caused injury to someone personally
You may have acted in an appropriate, illegal and/or irresponsible manner
You may not have been operating your small business as a separate unit
What Is Business Liability Insurance?
Factually speaking, business liability insurance is a way for small business owners to protect their business interests in situations such as claims for personal injury, lawsuit for property damages, etc. If you have this coverage, you'll be able to cover all your damages from legal cases as well as any legal costs incurred to do so. However, which type of business liability insurance you purchase, should depend on your business requirements.
What Are The Types of Business Liability Insurance?
General Liability Insurance: A type of business liability insurance that basically protects you and your business from claims such as injury, property damages, and advertising. Many insurance companies also refer to general liability insurance as 'Commercial General Liability (CGL),' and it could be the only type of insurance you may need for your business, depending on business needs.
Professional Liability Insurance: If you are in the business of providing services, you should seriously consider purchasing professional liability insurance, which is also called "errors and omissions." This type of insurance coverage helps keep your business protected against malpractice, negligence, errors, and any type of omissions. Again, whether you should get this policy or not will depend on your professional requirements. This policy is, however, a must for doctors who may be sued for malpractice or negligence etc.
Product Liability Insurance: This is a type of business liability insurance that is necessary for professionals who manufacture and/or sell products. The coverage offered by this insurance type include protection from injury because of use of the product etc.