While it’s not as exciting as health insurance, liability insurance is a crucial policy to own if you’re a business owner. However, there are so many different policies available that it can be hard to pick the right one.
Here are five questions that will help you choose the perfect liability insurance policy for your business. You don’t want to miss this, so stick with me till the end of this post.
Picking the Perfect Liability Insurance
With liability insurance being very different from a property or life insurance, it’s essential to understand it separately. Liability insurance protects you if your property injuries someone or if they are hurt in your place of business. In other words, liability coverage provides legal protection against physical harm caused by you or a company employee.
It can also protect you against non-physical harm like slander and libel. The first thing you should do is understand your current policy’s coverage. If you don’t have any (or enough) liability coverage already, that will be your starting point.
Next, figure out how much coverage you want. As with all types of insurance, there are limits on liability coverage. Make sure you know what those limits are before committing to a policy.
How do I get it?
You can purchase liability insurance through an independent agent or broker through an online service. Also, you can purchase it directly from an insurer. Whichever route you choose, make sure you shop around.
Different companies offer different rates based on their underwriting criteria. Also, consider that certain factors – like your personal credit score – may affect how much you pay for coverage.
Is it necessary?
Most states don’t require personal liability insurance, so it’s good to consider purchasing the least coverage for starters. Depending on your line of work and other factors, you may want more or less liability protection than others. For example, a freelance writer might need more protection than an employee at a large corporation.
Take time to assess your current situation and future goals when choosing how much liability insurance is correct.
What coverage do I need?
The best way to know how much liability insurance you need is to talk with a broker or agent. They’ll ask you questions about your personal and professional life and help you understand what coverage is available. Also, they’ll let you know what kind of risks you’re exposed to.
Asking for recommendations from your peers may also be helpful in understanding which companies offer high-quality service at reasonable rates. You can then use that information to pick an insurer that fits your budget and needs.
Liability insurance covers legal fees if someone files a lawsuit against you also any settlements or judgments made against you. It will also pay for defense costs if you are charged with a crime in some cases. Moreover, it doesn’t matter whether you did anything wrong; it will protect you if you have liability insurance.
There are typically three different types of liability insurance: general liability, product liability, and professional liability.
How much do I need?
The amount of liability insurance you’ll need depends on many factors. This includes how much money your business brings in each year and how many people work for you. You’ll need to purchase just enough insurance to match your business income so that you don’t spend too much.
Talk to an insurance agent if you’re unsure how much you need to spend on your insurance.
General Liability
It covers claims related to bodily injury (including death) and property damage you or your workers cause. For instance, if someone slips and falls in your office, general liability would cover their medical bills. If one of your employees spills coffee on a customer, that customer could sue you under general liability.
Product Liability
If you or your business workers sell a product with a negative effect on a customer, this liability comes into play.
Professional Liability
It provides coverage for businesses to protect against neglected claims from customers.
Who should get it?
The term liability insurance makes you think of large companies and Fortune 500 corporations. However, most small businesses need to protect themselves from potential liability issues. This type of insurance is critical if your business deals with visitors regularly, such as restaurants.
Even if your business has no physical location and works entirely online, you should still consider liability insurance. You never know when someone might come after you for something they believe was your fault.
When should I get it?
If your state requires all businesses to carry liability insurance, you should get one immediately. However, there are some situations where you’ll want to purchase additional coverage beyond what’s required by law.
If you have employees who regularly deal with customers at your business place, additional liability insurance could be necessary. You must get coverage as soon as your business enters its full bloom.
Do I need to buy it separately?
You don’t need to purchase liability insurance separately. In many ways, this largely depends on your history with insurance companies. If you had coverage earlier, figure out if you can purchase liability insurance as an extra.
This will help you cut down on unnecessary costs. Don’t forget that many insurers offer discounts when you purchase more than one policy.
In some cases, if you did not have coverage at all, then it’s time you have a session with your company. Discuss and let them know that you wish to have other policies from them as you’re buying liability insurance. Figure out the extra insurance they want to bond your liability insurance with and ensure they work well with you.
Don’t waste time and money purchasing insurance you don’t need simply because you want to bundle multiple policies. Instead, purchase liability insurance separately. If you feel that’s the only insurance you need, it’s okay.
Conclusion
Making decisions on insurance is quite complicated, and we understand. With these questions above, you should have a good mental picture of what you want. Without much talk, you should easily buy what you’ll love.
