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Business liability insurance is essential to any business regardless of the size of the company. Business liability insurance is similar to a third party car insurance, in that it covers your business for damage done to a third party or their property. It is commonly called public liability insurance or personal liability insurance if you are a sole trader. In layman’s terms, if you injure an individual or cause financial loss to their property while on the job then your insurance company will cover you as a part of your liability insurance property. In some countries and industries, the third party coverage umbrella (i.e. person) is obligated to cover whether it is a bystander or someone on the job.
Liability insurance is not only a good idea, but usually a requirement enforced by law or by a company hiring you. Many construction companies will not contract a sole trader or business unless they have liability insurance and government will usually insist on it for any government contracts obtained. Also, medical practices are often required to have liability insurance in case of damages inflicted on a patient. If there is an angry patient at the end of an accidental medical procedure could successfully sue you for millions; in a scenario like this is where the medical liability umbrella coverage will save you from getting wet when it pours.
A few recommendations prior to getting business insurance quotes, in which case you almost always need to contact an insurance company or broker. The insurer will need to converse with you in order to understand what risks are taken upon when doing business and can ascertain how much your insurance premium will be. An important element to keep in mind is that there is no one size fits all type of insurance liability system, beware of sites or companies that offer instant quotes.
Not having enough insurance coverage can be just as devastating as having none at all.
Tree trimmers as an example, would have much higher insurance premium than an IT developer. One is indoors all day working on code, the other is flinging ropes around braches, using chainsaws at 10 meters high and cutting branches that could easily crush a small car let alone an unsuspecting afternoon jogger who didn’t see the stand clear signs posted around the work area. Don’t think for a second that this type of compensation doesn’t happen, you hear similar stories every day, and there is always someone that has to compensate and another who needs to be compensated for. This is where insurance companies come in and save the day, and stop an accidental disaster to becoming a financial tragedy.
In addition to business, public and personal liability insurance there is also business insurance which covers your business’s assets, similar to comprehensive car insurance which covers you for damages to your car. If your business owns the building or contains items with it like computers, photocopiers, cranes, tractors or any possessions of value that are needed in order to conduct business and which need to be covered in case of potential damage, then you will have to get additional insurance on top of your liability coverage. You might be able to get a better price if you where to bundle them with the same insurance company.
Business liability insurance is something that all businesses should have and which many must obtain. If you continue operating your business without being covered, you could find yourself in serious financial trouble and even in bankruptcy court if an accident is caused in direct result of your business operations. Do yourself a favor and ask yourself this simple question and respond honestly, could you’re really afford to be sued for hundreds of thousands of dollars including the legal fees? If the answer to this is no or you cannot answer without uncertainty give us a call.