Starting your own business involves a huge amount of work. Deciding on your niche, setting up where you will work, managing your finances, and finding clients and customers can take a lot of time and effort.
The one thing you don’t want to happen is to see it all go to waste should you be sued for a large amount of money. But this is exactly what happens to businesses all the time.
And it does not matter how small your business is. You can still face claims, some of which might be false but which can still end up costing you a significant amount in legal fees.
As a result, many businesses have liability insurance, so here’s a guide to what you need to know about this.
Types of Liability Insurance
There are various types of liability insurance that you should know about. Some of them may be relevant to your business, whereas others might not be.
The main product is general liability insurance, and this usually covers a wide range of scenarios. For example, it could cover you if someone becomes injured as a direct result of your business activities and makes a claim against you because they feel you are responsible.
It is sometimes the only type of cover you need, but this depends on your business and the type of service you are providing.
Professional liability insurance is slightly different. This is aimed at those business owners who provide a service, and it is often called “errors and omissions” insurance.
It is designed to cover you in the event that you make a mistake or are negligent in some way. You may find that it is legally required depending on your profession. For example, doctors often need to have it.
Then there is product liability insurance, which you might want if you are selling a product. Someone might become injured from using your products, and this provides you with the financial cover in this case. If you do not sell or manufacture products, you probably won’t need this.
Ask Your Lawyer for Advice
If you are unsure about which type of insurance product you should get to protect your business, speak to your lawyer. They will be able to advise you on the risks and the types of protection you should consider.
There are also other types of insurance that you might want to consider, and your lawyer can provide you with advice on these as well.
Whatever type of insurance you choose, there will usually be a limit on the amount that it will pay out. This amount varies, so you will need to find out what you are covered for.
For example, if you have a limit of $100,000 and you are sued for $150,000, you will have to pay some of the money yourself. So it’s important to work out how much you should get cover for and then choose the right option that will protect you.
Do You Need Insurance?
There is often no legal requirement to have liability insurance, but it depends on your profession and where you work, so always find out.
Even if it is not legally required, it is usually highly recommended. But don’t assume that it is only useful for businesses in high-risk areas. It is also considered a good option even for small businesses that don’t seem to have much risk.
Let’s say you become a yoga instructor and you work from home providing private lessons. What could go wrong?
Well, one of your clients could become injured during your class. Or they might decide that you have not delivered on your promises. Or they might think that you have provided them with bad advice. Any of these could result in a claim.
Fortunately, insurance exists that is specially designed to cover services as niche as yoga instructors. Check out this yoga liability insurance at next-insurance.com for example.
Or you might be a photographer. During a shoot, an expensive ornament gets damaged and the owner sues you. Or you could lose your expensive photography equipment. Insurance can cover you in both circumstances.
So whatever you do, and no matter how small your business, there is a good chance you can benefit from the peace of mind insurance brings.
Find Out More About Your Insurance Situation
There is no point taking huge risks when you start your own business because there is too much at stake. But if you are still unsure about whether you should get liability insurance, ask yourself whether you would be able to deal with a large claim if it was made against you.
If not, you might want insurance for your own peace of mind. It will allow you to focus on running your business and making it a success without worrying about being on the wrong side of a claim.
So consider all the options, look at the insurance products available to you, and decide whether it is something that you would like to protect your business.