Starting a small business in any industry is like taking care of a child, it needs to be nurtured, and it needs safety. If you are starting a small business, or if you already own one, but need some upgrades, this article will explore a key element in ensuring the safety of your small business; what to know when starting out, and what to add if you do not have it already – what this is is liability insurance or general insurance for liability; does your small business have liability insurance?
General Insurance for Liability, otherwise referred to as Commercial General Liability Insurance (CGL), is a good and basic starting point for any business owner looking for insurance policies. Liability insurance covers a wide range of risks and it is one of the most affordable insurances out there with premiums that range that can start anywhere from $350 to $2000.
Accidents can happen anywhere, any time, and unexpectedly, and owning a small business that offers any kind of services or has employees can attract potential injuries or even lawsuits. Whether wanted or not, it is a necessity and responsibility of every business owner to provide a safety net for their small business.
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What is General Liability Insurance
As mentioned, general insurance for liability covers a wide range of risks and costs, for example, if there are injuries on the business premises, any legal defenses or lawsuits, and any harm that may have been caused by the owner or employees, however it needs to be noted that it does not provide 100% coverage; according to the needs of the business other insurance policies will need to be taken to provide the additional coverage.
Let’s take a closer look at what Liability Insurance covers.
Damages to Body
Liability insurance will cover any injuries or harm done to a person’s physical body, which applies to non-employees.
Medical
Any medical payments will be covered if they are due to injuries or accidents that occur on the business premises.
Liabilities
This can fall into two categories, namely: personal liabilities and advertising liabilities injury.
Personal liabilities consists of any of the following:
- Slander
- Libel
- Copyright Infringements
- Any invasions of property or privacy
- Evictions
- False Arrests
Advertising Liabilities injuries can consist of the following:
- This can involve any harm caused to others from the business advertising, which might ensue in losses.
- Any violations of another company’s copyright.
Other Losses
These might include any losses or damages to intellectual property, for example, if you lose a client’s data.
Damages to Property
This can involve any damages caused to the business property or personal property, which includes the business owner’s or client’s property).
Legal
Liability Insurance will cover legal defenses or judgments incurred and cover the costs for any possible losses that might.
Liability Insurance Benefits
Having liability insurance for your small business can hold your business in good stead, below are some benefits to having general insurance for liability.
Security for Business
If your small business has liability insurance it sets a good example as a solid and steady business, with a sound foundation. Clients will feel that they can trust you as a business and that it won’t be a ‘flighty’ set up.
Success for Business
With a secure foundation for your small business clients will not only feel safe, but they might require a business insurance certificate before doing work with you, and this can gain you, as a business owner, more clients. Conversely, if you do not have insurance it could cost you potential clients.
Safety for Employees
In addition to having a firm reputation with clients, having liability insurance will also show that you take care of your employees, and if there are any accidents or unforeseen incidents on work premises employees can know they will be covered by insurance.
Costs of Liability Insurance
As mentioned, Liability Insurance premiums will cost anywhere between $350 to $2000, but this will be dependent on the type of business and the policy taken. Several factors can also impact the costs of premiums and as a small business owner it is worthwhile to understand what these are:
- Location: this can impact insurance premiums, for example, if one area poses a greater environmental risk than another (floods or earthquakes).
- Industry of the business: the type of business can change the cost of premiums because some businesses are higher risks than others, for example, construction work versus a small bakery or clothing shop.
- Annual Payroll: this can determine premium quantity in terms of how many employees there are in the business and what the payroll amounts to annually.
- Length of Business: how long the business has been in operation will affect liability insurance premiums.
Additional Information About Liability Insurance
Liability Insurance will cover any small business that owns real estate or other assets and so it is recommended to obtain it, however it is not required by law to carry insurance, but as previously stated, some clients or property business owners (for office spaces) will require proof of insurance.
A Certificate of Insurance can be requested from the insurance agent to show to potential clients if they need proof of insurance.
For small business owners a General Liability Insurance policy is the best place to start when thinking about applying for insurance. Liability Insurance covers all the necessary risks that will safeguard your business, as this article explored, basic cover will provide protection from any damages or injuries that occur on the premises, and it will provide a professional foundation and reputation in terms of showing clients that the business functions ethically. If you are a new business owner and not sure where to start, or if you are an established owner and need to make any changes to your insurance policies, visit TRUiC’s informative website to read more about General Liability Insurance for small businesses, additionally, you can find more information on how to contact insurance agents or brokers who will assist you in you business needs and give you an insurance quote.
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