While you are trying to grow your small business, remember to protect it with liability insurance. If someone sues you for negligence and injuries, you will need to pay for the cost of defending yourself in court and potentially paying for their damages. When you face situations like this, having liability insurance can mean keeping your doors open and going out of business.
Here is everything you need to know about liability insurance.
What is liability insurance?
Liability insurance covers your legal costs and payments to the injured party for covered claims. Unlike workers’ comp, it is not legally required. However, customers can have accidents, such as slipping on a freshly mopped floor. Your product could malfunction and damage someone’s property. You could unintentionally infringe on your competition’s copyrighted ads. These can all lead to claims. Fortunately, liability insurance can cover the costs of these incidents.
Do you need it?
While it is not legally required, it is a good way to protect your business. In some cases, such as when you are applying for operating licenses or signing contracts, you might need to provide liability insurance. Some customers might only hire you if you have insurance. Plumbers and electricians usually must have insurance to get or maintain their licenses. Additionally, you might need it to rent a space for your brick-and-mortar operation.
If you have a particularly high-risk business, you might consider an umbrella policy that offers more coverage. Otherwise, you should consider purchasing liability insurance to help protect your business in case you have to defend it against a negligence and personal injury lawsuit.