How to obtain a better deal on small business liability insurance

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business liability insurance

Owning a small business, as well as having employees, will always have risks involved. Accidents or lawsuits of any nature can happen in any small business and being aware of and planning for any potential risks in the future can save a lot of time and money, and provide protection not only for the owner of the company, but also for the employees. This article will focus on small businesses what the best insurance is to obtain to protect them against lawsuits or any potential unforeseen events.  

The best way to protect a small business is to obtain a General Liability Insurance policy, not only is it cost-effective, but it’s also reliable to provide general cover against any unexpected accidents or lawsuits; it will cover legal defense and any costs incurred by losses (if you are liable). 

A small business owner needs to have knowledge of what risks will be covered by General Liability Insurance, what won’t be covered, and what criteria will ensure the best policies and premiums for a better deal and to make the best decisions for the protection of the business and ensure effective risk management procedures, additionally, there are benefits to having liability insurance, which will provide any small business with better foundations to stand on. 

Risks Covered By Liability Insurance

Below are risks that will be covered by liability insurance:

Legal 

Any legal defenses or judgments against the business owner will be covered. 

Medical 

If there are any injuries on the work premises payments will be made towards medical expenses, if these are non-employees. 

Liabilities

These can include personal liabilities, for example, slander against the business owner, libel, copyright infringement, or any invasion of privacy or personal property, in addition to these false evictions and arrest can also be covered. 

Other than just personal liabilities, advertising liabilities can also be covered, however these include any losses that the business owner may cause for other business, either through their advertising methods or messages or any copyright infringements. 

Injuries

Injuries will include any harm to a person’s physical body. 

Risks Not Covered By Liability Insurance

In order to have a successful small business and what to do, owners also need to know what not to do, and having an understanding of what won’t be covered by liability insurance will assist the business owner when planning risk management strategies and what other insurances to look out for. 

Damages 

Damages may include the following: 

  • If any services or advice offered to clients cause any harm to them, financially or otherwise.  
  • Damages from environmental factors like fires or storms on commercial property. 

Terminated Employment 

Employees that have been let go from the work will require a different insurance coverage (Worker’s Compensation). 

Vehicles 

Commercially owned or operated vehicles will need different insurance coverage (Auto Insurance). 

Injuries 

Any injuries that may occur on the work premises to employees. 

Warranties 

These include any warranties that the business offers. 

Intentional Acts 

Any acts that the business undertakes intentionally and that may cause harm won’t be covered. 

What Criteria Will Ensure the Best Premiums for Small Business Liability Insurance?

The following criteria will affect the value of the premiums for small businesses, knowing these will also ensure that any business owner can prepare well and manage potential setbacks:

Location 

The location of the small business is important because of potential environmental risks, for example if there is a chance of flooding or tornadoes. 

It is also important to be aware of different regulations in each state; not every state will have the same stipulations to follow when applying for insurance or opening a small business. 

Industry and Level of Risk 

The industry also determines the level of risk for the small business, in other words, if the business has a higher chance of injuries that may occur on the work premises, for example a construction company, the premiums will be affected compared to small business like a bakery or shop. 

Amount of Employees

The amount of employees and what the annual payroll amount culminates in, in a small business, will affect the premiums.

Benefits of Liability Insurance for Small Businesses

Lastly, obtaining liability insurance for a small business will have benefits, which will inevitably provide better protection against any unforeseen events or lawsuits. Below are three benefits that liability insurance can provide: 

Security and Trust 

A small business with liability insurance will show that it is a business that operates professionally and securely, and will be easier to gain the trust from clients.  

Employee Protection 

Having insurance will also benefit employees as they will feel more safe within their work environments and know that they are taken care of by the business. 

More Clients

A small business may gain more in terms of clients and money because some clients will require a business to already have insurance prior to working with them. This is to ensure protection against any possible setbacks that may occur while working together. 

Risk Management 

An important aspect of gaining a better deal on liability insurance is risk management strategies, which can lower premium costs. As discussed, understanding what to and what not to do in terms of liability insurance can impact the rate of the premium and policies for the small business owner and creating risk management strategies will help for the overall protection of the business, it’s services, assets and employees. For more information and guidance on what procedures to take, it’s recommended to contact an insurance agent, who can provide more guidance.

Planning ahead is the best protection for small businesses and obtaining the best deal starts with being aware of the potential risks involved and how to effectively manage them. It’s also important to know what won’t be covered by an insurance policy in order to move in the right direction in terms of insurance policies. For more details on liability insurance and what the best type will be for any business, visit TRUiC’s valuable information on small business liability insurance.

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