When small business owners are looking to cut costs, liability insurance premiums are often one of the first things to go. But while many business owners might believe that they don’t actually think they need it, why you should actually carry small business liability insurance is often misunderstood. Here are 4 points you should consider before deciding whether or not to carry small business liability insurance coverage.
Aren’t at-home businesses are covered by homeowners insurance policies?
Most homeowner’s policies specifically exclude liabilities created in the course of business. If a friend, colleague, or a client is injured at your place if business, consider the potential costs. Also, consider if you use your car for business-related purposes. Even personal vehicles used for business purposes need additional commercial coverage beyond your personal auto insurance policies. Speak to your business insurance agent to help you be protected from these sorts of risk.
My business is too small to need liability insurance
Unfortunately, no business is too small to have claims brought against it. These sort of claims can include:
- A defective product sold by your business caused harm to persons or property
- Anyone injured in the course of your business, especially on your business’s property.
Fortunately, liability insurance can cover damages for which you are found liable up to a certain point. It can also cover other legal expenses, such as attorney’s fees. If you have sufficient enough coverage, your insurance can even help pay the medical bills of anyone injured by or at your place of business.
My business should not have work-related injuries, so I don’t need coverage.
Even if work-related injuries are unlikely in your line of work, they can actually happen. Obviously, some businesses can carry much less coverage than others. But, liability insurance covers much more than physical injuries on company property. It also can cover claims such as copyright infringement or libel, as well as false or misleading advertising. If your business operates out of rental property, your liability insurance can protect you against damage to that, as well.
Liability insurance covers me in the case of lawsuits
Yes, liability insurance can protect you by covering legal fees in the case of lawsuits. But, unfortunately, despite what some people might believe, liability insurance doesn’t simply cover you in the case of a lawsuit. There is a maximum amount that your policy will cover.
Liability insurance does cover you in legal cases, but only to a certain point. Your insurance agent can help you decide whether the liability maximums are sufficient for the size and scope of your business.
Essentially, small business liability insurance probably covers more than you think it did. You may seriously want to consider even adding additional liability coverage for your business. Ask your business insurance agent about getting just the right coverage for you.