Owning a business is a massive responsibility. There are so many factors to consider, from payroll to inventory to keeping overhead costs low. Insurance is one of the most important things you can take advantage of to protect yourself and your business. If you’re a business owner and you’re looking at different types of insurance options, you need to consider liability insurance. Here’s your guide to liability insurance at a glance.
Liability Insurance Protects You and Your Business
Much like your car insurance protects you while you’re driving and your homeowner’s insurance protects your house and property, liability insurance protects your business. If your employees cause damage to a person or his or her property in the course of conducting business, liability insurance protects the company. If a product or service your business offers causes harm to someone, your liability insurance policy takes care of them. Your business liability insurance should cover both damages and defense if you face a lawsuit for any of the reasons mentioned. Because your business is an extension of your hard work and efforts, liability insurance takes care of you as well as your business.
It’s Important to Think About the Cost of Your Coverage
There are several financial factors that you need to take into consideration when it comes to a liability insurance policy for your business. Think about the premiums, and make sure that you can afford the monthly cost of a liability policy. The monthly premium is the payment you make the most often, so be sure it’s feasible. Consider the limits of your liability insurance policy. Many of these limits are standard, but it’s important for you to know and understand the highest amount your policy covers. Finally, you need to think about the deductible. Just like with any other type of insurance, you can save money on your premium with a higher deductible, but if your deductible is too high, your insurance may not be worth what you’re paying for it.
Liability Insurance Is Like Malpractice Insurance for Businesses
Another term for liability insurance is errors and omissions (E&O). That term gives you a good idea of one of the most important reasons for a liability policy. The most common liability risk involves something similar to malpractice insurance for doctors. If your business commits an error of some sort that causes damage to a person or property, your liability insurance kicks in. Incidents of neglect that create problems for your customers also fall under your liability policy. You should always think of a liability insurance policy for your business as a form of malpractice insurance for your business.
Consider Bundling Liability Insurance with Property Coverage
Every business owner wants to save money. That’s the natural bent of an entrepreneur. But you don’t want to save money by skimping on your liability insurance policy. One way that you may be able to save money on your insurance is by bundling that insurance with property coverage. Instead of two policies, you can have one policy, albeit with a higher premium. Combining the two policies together allows your liability insurance to cover property and vice versa. It creates a stronger policy with more protection for you and your business. Talk to your insurance agent about creating a bundled policy.
Read the Fine Print
Just like with any contract or any important business paperwork, it’s essential to read the fine print in your liability insurance policy. You need to know the ins and outs of the policy and be aware of the exact coverage that it offers. Know how your liability policy covers damage and theft, and understand what limits the insurance includes. Make yourself aware of any seasonal clauses that add more coverage for busy seasons, and consider adding such a clause if you don’t have one in your policy. Having as much knowledge of your policy as you can gives you more peace of mind and prevents surprises.