Liability Insurance for Small Business

2007-07-24 08:31:47

( Insurance )



What is Liability Insurance?

As an organization that is open to the public, your business is expected by law to be accountable for the safety and welfare of its customers, delivery people, employees and even ordinary passers-by. If anything adverse were to happen to anyone in your office or its surroundings, you could be held liable to compensate the party who is injured or affected in any way. For instance, anyone who slips and falls in your office could file a claim against you for negligence in providing safety features in your premises.

Liability insurance guards you and your business against such untimely claims and lawsuits. The insurance extends to all types of incidences such as injury, fatality, property damage or losses that your business may either directly or indirectly cause. In fact, liability insurance is even compulsory in many countries.

Types of Liability Insurance for Small Business

A general or comprehensive liability insurance for small businesses covers almost all risks. However, you may find this type of insurance plan difficult to afford, especially if you are just maintaining a small business. Besides, you may be overspending for liability insurance to cover for things that you don't need to.

There are also more limited forms of liability insurance for small businesses. The professional liability insurance protects both you and your stakeholders from any claims due to business practices, errors or omissions that have caused harm. A product liability insurance covers against any claim to injury because of a feature or ingredient in your product.

Finding the Right Liability Insurance for Your Business

The trick to saving more on your small business liability insurance costs is to carefully study your business set-up such as your office location, building materials, layout and fixtures. The way your store doors open or the fact that your working area is always exposed to moisture spell out certain possibilities of risks. The nature of your business is especially crucial in figuring out what exactly you must protect yourself against.

You need to discuss your liability insurance needs carefully with the insurance company to pinpoint which part of your business operation may have the biggest risks to cause any adverse incident.

Many prestigious insurance companies offer liability insurance for small businesses. Shop around and negotiate carefully with various insurers so that you will get the right package for your own business needs. You can also consult industry associations and colleagues to get good recommendations.


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