Business ownership is not for the faint of heart. In addition to the everyday challenges that accompany being a business owner, you also have to protect yourself from the unexpected. Commercial liability insurance builds you a solid defense against litigations that could cause severe financial damage.
6 Things to Know About Commercial Liability Insurance
1. You Can’t Afford to Overlook it
Many new business owners ask, “Do I need to have liability insurance for my business?”. The answer to this inquiry is a resounding yes. No matter how newly formed, every business can benefit from the security commercial insurance provides.
Business owners that rent or own a space that the general public or customers can enter are vulnerable to lawsuits if an individual is injured on the premises. Additionally, individuals who work with clients directly or those in charge of assets owned by their clients need the protection of insurance to ensure that an accident or litigious client does not cause them financial ruin.
2. It Covers Most Situations
Liability insurance for businesses provides coverage of legal expenses due to an injury or accident on your commercial property or where your companies’ services are performed. This coverage includes bodily harm, personal injury, and injury or property damage caused by a product you sell or manufacture. Advertisement injury is also included under business liability insurance and provides you with protection against claims of false advertising.
3. But Not Every Situation
Knowing what your policy doesn’t cover is as essential as knowing what it does. For example, most liability insurance policies don’t cover employee illness or injury, discrimination, sexual harassment, or defamation of character. Unfair competition and verbal promises are also not covered.
4. You Might Need Several Types of Insurance
Most companies need more than just liability insurance. Factors such as your industry, the number of employees you have, and whether you use company vehicles impact the type of additional insurance you could need.
Company vehicles are assets that are expensive to repair or replace, and if losing them would negatively impact your business, you need to have automotive insurance. If you have employees, you’ll need to add worker’s compensation insurance that meets your state’s requirements.
5. Add-Ons are Available
Depending on your situation, standard liability insurance may not provide you with enough coverage to feel secure. Your ISU-ARMAC Insurance agent can help you determine if your business needs an umbrella, or commercial excess, policy.
An umbrella policy covers claims that exceed the limits of your original policy. As an example, if a client successfully sues you for $5 million, and your liability policy only covers $4 million, you would be responsible for paying the remaining $1 million yourself. However, if you have an umbrella policy for at least $1 million, that policy would cover the remainder instead.
6. It’s Worth Every Penny
If you’ve never purchased commercial insurance before, you may be surprised by its affordability. Depending on your deductible and coverage amount, it’s common to find policies around the $50 price point. However, keep in mind that it’s worth paying more each month to ensure your assets are fully protected.
Don’t risk losing what you’ve worked diligently to build. By protecting your business with liability insurance, you are taking a vital step towards providing yourself with a stable financial future