One important aspect of running a small business that is sometimes overlooked by new business owners is liability insurance. Many choose to put off purchasing this important coverage, and that can turn into a very costly mistake.
Liability insurance is vital to protect the financial health of your business. Without such protection, your business is just one mistake (and resulting lawsuit) away from being financially devastated.
To answer the question “how much does business insurance cost”, you’ll need to contact business insurance broker. They will be able to give you a cost that is based on the very specific needs of your business.
Below are some types of liability insurance for small businesses that you should consider.
Professional Liability Insurance
Some professionals, such as accountants and architects are protected in the event that they are sued by for errors or negligent act in the course of performing services.
Many professions have coverage that is geared specifically for their line of work.
If your particular work does not have such coverage available, some business insurance brokers have a liability policy that is more general in nature, and can be used to protect professionals in most any field.
Employment Practices Liability Insurance
Clients are not the only ones who can destroy a business by way of a lawsuit.
Employees and former employees sue small businesses every day for wrongful termination, harassment, discrimination and other human resource issues or errors.
Obviously, having solid policies in place will help your business avoid such lawsuits, but keep in mind that your business is responsible for the actions of employees while acting on behalf of the business.
Because people are fallible, this coverage is imperative no matter how strictly you try to enforce good policies.
Umbrella Liability Insurance
There is also umbrella type liability insurance for small business that will offer protection for a variety of situations.
Knowing how much small business liability insurance to purchase can be tricky. In addition to talking to a reputable broker, there are a few things that you can do to correctly estimate the amount of coverage you need as well as lower your premiums.
First, do a little research and learn how much the average lawsuits in your particular field either settled for or were awarded.
If the average suit results in awards of only a few thousand dollars, then you won’t need millions of dollars of coverage.
Be sure the broker that you choose has experience working with other business owners in a similar field. That will help ensure that he knows the business well enough to get you the right amount of coverage.
Obviously, when shopping for small business liability insurance you should not purchase after obtaining just one quote. Instead, get more than one quote to be sure the premium you pay is competitive.
By joining a professional organization you can compare rates. Another benefit is that some organizations have joined together to purchase group coverage. This will provide a savings on the cost of your liability insurance.
Don’t put off purchasing liability insurance for your small business. Once there is an incident, it will be too late.