Why Your Business Should Consider Liability Insurance
All businesses need to consider having liability insurance. This kind of insurance offers protection for the financial interests of both the business and its owners should they have to deal with third-party claims or lawsuits. Business liability insurance covers the direct financial liabilities businesses incur and also expenses related to their legal defense. Here are 5 good reasons why your business should consider liability insurance.
Why You Need It
There are lots of reasons why liability insurance is a good idea for a business, but these might prove more important than the rest:
● Protection From Lawsuits: Whether or not it’s too easy to file a lawsuit against someone these days is a matter of much debate, but lawsuits do happen frequently. Even if you win against a lawsuit, the legal fees involved can be dramatic. Depending on the specific lawsuit and the size of your company, it might only take one case to put you under for good.
● Property Protection: Your company’s physical property can be damaged or lost due to theft, vandalism, and natural disaster. Without the right coverage, you won’t be able to repair or replace things and keep your operations going. The consequential loss of revenue and decreased business activity will cost you even more money and time.
● Worker’s Compensation: A workplace accident can happen at any particular time. Paying for such a claim out of your pocket can cost your business a lot or even put you under. These claims can wind up being quite expensive depending on the seriousness of the injury and how long the employee is out of work.
● Meet the Mandates: Liability insurance is sometimes going to be required of your business. That requirement might be a local government law, a stipulation in your landlord’s lease, a part of your financing agreements, or even something contingent in client contracts. You might not even be able to keep or get your business license without it.
● Keep and Protect Your Employees: Your employees are one of the most vital elements to any company. Protecting them is necessary, and liability insurance can help you keep them employed. Your employees are going to work harder and feel safer knowing they’re part of a protected business.
Determining Your Needs
If you are considering liability insurance in Arizona or other US states, then determining your needs can be important. If you run a comic book store in Phoenix, then your risk of physical accidents and injuries is going to be lower than if you operate a jeep safari camp outside of Sedona. The kinds of insurance you might need will also vary. Any business doing e-commerce might have more need for cyber liability insurance than other businesses.
The Costs Involved
Every policy is different, and Investopedia lists reasons why this happens. For starters, in addition to general liability insurance, you might also need product liability insurance and professional liability insurance.
The costs for your coverage are going to be determined by how your company’s risk levels are perceived by insurers. Anything involving heavy equipment and physical work is likely going to pay more for the coverage than an office where service professions are sitting behind desks. Having said that, workplace accidents can happen even in an office setting.
Companies who are in lower-risk categories could look into a business owner’s policy that mixes property insurance with general liability coverage for better pricing. Any business should review their coverage for exclusion clauses to make sure their bases are covered but also to eliminate duplicate coverage that can drive up their costs.
Companies with heavy levels of risk might augment their coverage. Umbrella insurance and excess loss reinsurance are both options to look into.
The Balancing Act
As you can see, having liability insurance for your business is more than likely something that you should do. However, you also have to make sure you have the right kinds of coverage and the right levels. Then again, you also want to make sure you keep your premiums and deductibles at levels you can afford. Fortunately, balancing all of this isn’t hard to accomplish when you work with the right people.