Why Buy Business Liability Insurance?
As a contractor or small business owner, business liability insurance can protect your company if the unexpected happens. Liability insurance (also known as commercial general business liability insurance) covers a variety of situations, including injury or damages that occur on your property or that are caused by you or your employees. It can also cover costs associated with being sued, including legal fees, settlements or rewards. It would also cover claims of false advertising, libel, slander or copyright infringement. Regardless of whether you win or lose, such lawsuits can be extremely costly and time-consuming, taking your focus away from generating revenue. This can be devastating for a small business, so general liability insurance is extremely important. Small business liability insurance allows you to focus on your business even when you're faced with a claim of damage, injury or negligence. Three of the best known providers of general business liability insurance are Progressive Commercial, Liberty Mutual and Nationwide Insurance.
Business Liability Insurance:
Not all business or industries are the same, so you'll want to look for a company that has the background and experience to handle insurance for your type of business. Also look for testimonials. If you expect your business to continue growing, consider whether the company offers coverage that can grow with you.
Many companies sell general liability business insurance, but it can be challenging to determine the type of coverage you'll need. Consider the type of risk you face in your business. Different types of businesses have different types of risk. For instance, a doctor would need more coverage than an arts and crafts supplier.
If your business is high risk, seek out insurers that offer excess insurance or umbrella policies to increase your coverage limits. This will cover you when there is a claim against you that exceeds the amount of your general liability policy. Questions you should ask yourself, and the insurance provider, include: Can the insurer provide enough insurance to cover all of your assets' liabilities as well as damage? Is the liability insurance they provide adequate?
If you are a contractor or perform projects for other companies, it will be important to check with your client about insurance. A contract for which you perform work may require a certain amount of insurance coverage or an umbrella policy, or sometimes a company will add you to their general liability policy to be insured on a specific project. Some businesses are required by state law to carry certain types of liability insurance, so check and see what your state's requirements are.
If something should happen, you want an insurer that has a proven record of settling claims quickly and fairly. Check an insurer's claims process to see if they offer several options, including online tools, to submit and track a claim (this also includes the insurer's track record on how timely they processed claims). Seek out testimonials from individuals who have been through that insurance company's claims process. The insurer should have a history of high customer satisfaction. Business liability insurance should be responsive and supportive should you ever need to file a claim.
Workers' Compensation Insurance
Workers' compensation is a type of insurance that protects employers from potential lawsuits and provides injured employees with insurance payouts. Depending on the industry your business is in (or the number of employees you have), you may be required to have this type of insurance. Not having coverage can mean the difference between an insurance payout for an injured worker or an expensive lawsuit that could force your company into bankruptcy.
There are additional built-in protections with workers' comp. It can often prevent a third party from suing you in the event of an employee injury. Let's say, for example, a worker is injured while using a heavy piece of machinery. If that worker sues the machinery company, workers' compensation can provide you with a safeguard against the machinery company suing you. This is a basic example, and legal situations are often more complex. The key takeaway is that workers' compensation can not only serve as a benefit to your employees should they be injured, but it can also serve as a safeguard for your business.
Each state has different workers' comp legal structures. Some states require you to have it; others leave your decision to enroll at your own discretion. Your cost structure will also vary by state. Depending on your industry and state, you should expect to pay between 1 and 4 percent of your total payroll for workers' comp insurance.
Despite laws in place around workers' comp, Insureon found that only 17 percent of small businesses surveyed said they were enrolled in workers' comp insurance. If you don't have workers' comp, or haven't thought about it, it can be a good step toward providing employees with a good benefit while also protecting your business.
Additional reporting by Matt D'Angelo.
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Common Business Liability Insurance Questions & Answers
For workman's compensation, there are standard codes that all insurance carriers use. So, yes, in essence many carriers will have the same rates or similar rates because it really boils down to your payroll and the type of company and workforce you have. However, I would still encourage you to get bids as some companies will allow discounts/credits and occasionally rates will vary.Read More ▼
In general there will be two types of coverage companies offer. One if basic coverage in which there will be a fixed standard coverage amount pre decided by the Insurance company based on rough estimate. Second one is extended coverage where you can set a premium value for goods as per market price (good valued at market at showroom rate). This should attract some amount of fee from customer as insurance fee.Read More ▼
Being pet friendly is great if you have a way to set rules on where the dogs are and if you have a special area of them to play. How do you separate from customer meetings as some customers may not enjoy dogs (even the smell which may be another concern) and they could be a distraction during meetings. I work from home so I am with my dog. Some days he really wants to play and with no other dog around, I find myself playing instead of working. This means I work later into the evening and...Read More ▼
Mr. Roth is correct. In addition, you should look at your local state law to see what law applies to products liability. Products liability law varies from state-to-state, with some state laws being more business-friendly than others. Also, you should check to see that the manufacturers of products you are interested in allow distribution by folks like yourself, or whether they have exclusive distribution agreements. I represented a Wellness Center that received a cease and desist letter...Read More ▼
List of 10The Best Business Liability Insurance Providers of 2019
Read our unbiased review of AIG. See how AIG compares to the best Business Liability Insurance.
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Read our unbiased review of Chubb. See how Chubb compares to the best Business Liability Insurance.
Read our unbiased review of Farmers. See how Farmers compares to the best Business Liability Insurance.
Read our unbiased review of Hiscox. See how Hiscox compares to the best Business Liability Insurance.
Read our unbiased review of Liberty Mutual. See how Liberty Mutual compares to the best Business Liability Insurance.
Nationwide - Business Liability Insurance
Read our unbiased review of Nationwide. See how Nationwide compares to the best Business Liability Insurance.
Read our unbiased review of Progressive. See how Progressive compares to the best Business Liability Insurance.
Read our unbiased review of State Farm. See how State Farm compares to the best Business Liability Insurance.