If you are starting your own business, one of the most confusing aspects of setting it up is knowing what types of business insurance you should have. There are many types, all covering different aspects of your company and your customers.
This article focuses on business liability insurance and its importance. Simply put, any small business needs to obtain this coverage. It is your company’s main source of protection against lawsuits and the damage that they can cause your company financially. One lawsuit lost is all it takes to destroy a business without sufficient liability coverage.
If you sell products or goods of any kind, you need business liability coverage to protect you from lawsuits from customers claiming injury or sickness due to the use of your product. A customer can sue your business even if some part of your product that you didn’t even create caused the injury. Good liability coverage will cover you in case you lose a judgment.
If your company sells services or advice, you need it as well. There is a specific type of business liability insurance called the errors and omissions coverage. This coverage will protect you from financial judgments issued to a client that sues your four negligence due to bad advice that leads to financial loss, or a service rendered that was not satisfactory or may have even caused permanent damage to something or somebody.
The level of protection that you need from this type of business coverage depends on how much you have to protect. What is your company worth? How much revenue does it generate every year? Make sure to solicit the advice of an insurance professional to guide you to the right amount of coverage.
By Marissa Oldman