As a small business owner, you’ve spent countless hours formulating your business ideas and getting your company started. Now that you’ve done all that work, it’s important to protect your investment against lawsuits and other losses.
There are many types of business insurance, some specialized for different industries. There’s also general liability insurance, which is available on its own, or together with other insurance types.
Have you thought about getting general liability insurance for your small business, but aren’t sure whether you actually need it? As a general rule, everyone needs liability protection. It’s included in almost all personal property policies and it’s something your business absolutely needs as well. Things can happen at the worst possible time, and if you aren’t prepared, your company could go under.
If you’re tempted to skip getting liability insurance because of the extra expense, have an Independent Agent like Harris Insurance shop multiple markets for you. The investment will more-than pay for itself in the event you have to file a claim. Here’s an overview of why liability insurance is so important for your business and why you should consider it a worthwhile investment.
What is General Liability Insurance?
So, what is liability insurance? This type of insurance can protect your company from unexpected disasters, angry customers, and accusations of poor performance. These are all examples of things you can’t always control as a business owner, but all of them can devastate your company if you are not prepared for the worst possible outcome.
Business liability insurance gives a policyholder legal protection and protects their personal and business finances in the event of a lawsuit. Because we live in a lawsuit-heavy world, having this protection should be a basic requirement. Without protection, an angry plaintiff could bankrupt a small business owner and leave them with nothing to show for all their hard work and dedication to their field.
What Can Happen if Your Small Business is Not Insured
The answer is not pretty. Even if you’re in an industry that seems to be low-risk at first glance, angry or disgruntled customers can be creative when it comes to thinking of reasons to sue. Small business insurance is the best way to protect yourself from these problems.
If you are unprepared for insurance liability issues, it can mean the end of the business, bankruptcy for the owners and managers, and even reputational ruin. Choosing to go without insurance is not only ill-advised, but it’s also reckless in 99.9 percent of cases. It leaves you wide open with no protection in the event that something goes wrong.
Things That Can Go Wrong in Business
Your business needs liability insurance for things you may not even think about until they happen. Most issues that become problematic aren’t obvious from the beginning. So, when something does go wrong, a small business owner is likely to be in for a surprise.
If you operate out of a physical location, you need to think about issues like slips and falls.
Having a delivery service or working with food are some other business situations where you absolutely need liability insurance.
If you have employees, you will also be responsible for the actions of those employees.
If your small business revolves around selling manufactured products to customers, you’ll need to carry liability insurance. It will cover you in case of any defects in workmanship or other consequences that arise from using your products.
Do You Need Liability Insurance if You Have an LLC or Corporation?
Sole proprietorships offer almost no protection to business owners, but other business formats do offer some protection from liability. For example, Limited Liability Companies (LLCs) and corporations separate the owners’ assets from those of the company.
However, it’s still important for LLCs and corporations to carry full liability insurance. One reason is that legal expenses add up fast, even if a lawsuit is completely frivolous. Having insurance is the only way to guarantee that a business will stay intact financially in the event of a lawsuit by customers.
When You Might Be Able to Go Without Insurance for Your Company
So, when might you be able to skip liability insurance for your small business? Does it matter if you’re not in a risky line of work? What about if you’re fairly sure that none of your customers would ever have a reason to sue you for something?
Unfortunately, no matter how confident you may be that you won’t need liability insurance, don’t skip it. There’s never a time when opting out of liability insurance is a good idea.
Insure Your Company Today Against Liabilities
Now you’ve seen an overview of what general liability insurance is for, and why you should make sure you have it to cover your business. Whether you’re already a new small business owner, or just working on the plans, now is the time to check into getting a good business liability policy. You need to protect your ideas and all the hard work you’ve put into getting your enterprise established.
For more information about liability insurance, check out our website and see what we can do for you. We provide liability insurance and other types of coverage for small business owners. If you’re wondering about what it will cost you to protect your business, request a free quote from Harris Insurance today.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
