Choosing the best business liability insurance can be complicated. But no matter how difficult or time-consuming it is, choosing the right liability insurance for your business is crucial. You don’t want to simply sign up for an insurance policy without fully understanding how it works.
If you don’t have the correct liability insurance for your company, you could experience major financial loss. Another scenario is that you may end up paying for expensive policies you don’t need.
So how do you pick the right liability insurance for your business? You’ll find the answers to your questions in today’s article. Keep reading to find out more about the different types of liability insurance policies that are available and how to pick a provider based on your company’s requirements.
Business Liability Insurance Types
There are different types of liability insurance policies that will cover you for various risks. Property insurance will help cover costs of damages to your office building and equipment in the event of a fire, natural disaster, and even vandalism.
Another type of insurance to add to your property policy is interruption insurance. An interruption policy will protect you from loss of income due to the damages to your property.
General liability insurance will protect you against claims of injury or damage to your property caused by your products or services. If a customer falls down your stairs, you may face claims for medical costs. A general liability policy will help protect you against these types of incidents.
If you’re in the logistics industry, you’ll need business vehicle insurance. This policy only covers vehicles that are owned by your business. The policy will help pay for damages or losses in the event of a car accident when performing business duties in a company car.
Lastly, if you’re looking for a combined plan, your best bet is an umbrella policy. This type of policy covers you for various risks and may include liability insurance, property insurance, and interruption insurance.
The Benefits Of Business Liability Insurance
Some business owners may choose not to get insurance because they may want to save on costs. But this can be detrimental to your company in the long run. So here are a few benefits of choosing liability insurance for your company:
- Protection from the unexpected: Unfortunately, business owners don’t have control over everything that happens in and around their buildings. Accidents can happen, and you want to make sure you don’t experience financial loss when an employee gets injured on-site or if a fire breaks out inside your building. Liability insurance covers large costs when one of these unexpected scenarios occurs. When you have proper liability insurance, you can rest assured that you will be protected financially when accidents happen.
- More contract closings: Do you have a company that needs to close large contracts? Some partners may only want to close deals if you have an extensive insurance policy. Therefore, if you have business liability insurance, you could successfully close more contract deals.
- Data breaches: Since we’re living in a digital age, most companies complete tasks and administration work on computers. Other companies deal with personal client data such as financial accounts and credit cards, addresses, and names and Social Security numbers. Most liability insurance policies come with electronic liability plans, which will protect your business in the event of a cybersecurity breach.
- Protects your company from employee actions: Business liability insurance can protect your company’s reputation from slander by employees. Additionally, your liability policy can protect you in an event where employees may damage or steal company property.
How To Choose The Right Liability Insurance For Your Business
To choose the correct liability insurance for your business, you must do a careful analysis of your company. What are your legal responsibilities and what assets do you want to protect? Depending on what type of industry you’re in, you may need different plans. For example, a construction company may need insurance to cover the risk of employee injury, but a jeweler will need a policy for theft.
Furthermore, you should determine your company’s risks. For example, if you’re working in a dangerous environment such as a chemical plant, you may want to insure your business for fire damage or explosions.
Or if your company’s office is on the bottom floor in a region prone to flooding, you’ll need a policy to cover you for water damage. A proper analysis of your risks will help you pick the correct plan for your business.
Once you’ve determined your risks and you know exactly what assets you want to protect, it’s time to choose a service provider. Make sure you opt for a liability insurance company that will offer you extensive plans that cover all your business risks. Shop around for an insurance provider before choosing a plan and compare them according to the following criteria:
- How claims are handled
- Customer service
If you’re still not sure what parts of your business you should cover, consult an insurance broker for the best advice on what policy you should take according to your liabilities.
Ways To Save On Insurance Policy Premiums
The cost of your premiums will be determined by many factors such as your location or claim history. To keep your premium costs in check, you need to know what factors could increase the rates of your policy.
For example, if you choose a business location in a high-crime area, you may pay more for your premiums. What’s more, if your building has old electrical wiring and safety hazards, you’ll pay more for your policy. If you can, avoid moving into an office building that has high risks.
A company with repeated claims history may pay more for its liability insurance. That’s why it’s important for you as a business owner to minimize your risks as much as possible by ensuring your property is safe. Have emergency exists in key locations in your building, as well as fire extinguishers.
What To Consider Before Choosing Your Business Liability Insurance
Consider an umbrella insurance policy for your business. An umbrella policy provides extra liability coverage instead of simply offering you one or two plans. This policy can provide additional plans to protect the company from claims for things like slander, false arrests, and fraud. You can get a comprehensive umbrella policy at a reduced rate if you meet coverage requirements.
Another type of liability plan you should consider is disaster insurance that will protect you from hurricanes, floods and terrorist attacks.
Review Your Policy Regularly
Don’t just accept new policy changes without reviewing them first, because there may be some changes that mean you are no longer covered for certain risks. Or when your company starts to grow, you may want to enhance your coverage. When you buy new equipment or company vehicles, you’ll need to get these assets onto your plan. Reviewing your liability insurance policy regularly will help you manage your coverage and premium costs effectively.
Frequently Asked Questions (FAQs)
What Does Business Liability Insurance Cover?
It will depend on what liability insurance you opt for. There is general liability, professional liability, and product liability insurance. A business liability insurance policy protects the interests of a company in the event of lawsuits or third-party claims.
This insurance plan can also protect your company’s assets and claims for medical costs for injuries incurred on your property.
How Much Is General Liability Insurance For A Small Business?
Premium costs are determined by your company’s risks. The higher the company’s risks, the more you’ll pay for your policy. You can expect to pay up to $500 annually for the best general liability insurance for a small business.
What Is The Best Liability Insurance For Small Businesses?
One of the best liability insurance providers for small businesses is The Hartford. This insurance company offers multiple payment options, and you can make claims online or over the phone. The Hartford provides up to $2 million limited coverage for each incident.
This insurance provider offers different types of policies for small businesses, such as general liability, umbrella, professional, and even electronic data liability plans.
Does An LLC Need Liability Insurance?
Yes, your LLC (Limited Liability Company) will still need a liability insurance policy. You’ll need general liability insurance to protect you against third-party claims.
Are you still looking for the best business liability insurance? Shop around for the top liability insurance companies and compare them according to the type of plans they offer and their costs. If you’re not sure which policy to choose, then consult an insurance expert who will help you determine your risks and the assets you’ll need to cover.
What is your view on business liability insurance, and have you had this type of policy before? If so, what was your experience like with the insurance company you chose? Let us know by leaving a comment below. We are always happy to hear from our readers.