This post was written by Kate Webster, who also writes for lead generation resource, ResourceNation.com. She focuses on a variety of topics including small business insurance.
When setting out to find insurance for your small business, understanding what kind of coverage you need can be confusing. Customers and employees can sue for any number of things, and you need to be sure that you do not fall prey to a damaging lawsuit.
According to a study from the U.S. Department of Justice, personal injury trials comprised of almost 60% of total tort, contract and real property trials in 2005. Liability insurance will protect your company as long as you are being sued for claims that are within the coverage they are providing, so you can rest assured that your company won’t be dragged through the mud.
1. Being Sued for Negligence
Most commonly businesses are sued by a third party for negligence, usually resulting in injury. The insurance company will then be able to pay the customer some sort of compensation, so you don’t have to shell out for an unintentional injury.
But, if your company is liable for an accident, injury, or negligence, then you could easily be tied into a court case that could hurt your company’s growth and cost you a lot of money to settle; your liability insurance will pay for any and all court fees involved, as well as legal defense within policy limits.
2. Public Spaces and Liability
Public liability often pertains to public spaces and the involvement of a third party. The risk of injury or bodily harm drastically increases when sporting events or large crowds are involved, especially when alcohol consumption is present.
Many large public spaces are at the greatest risk for public liability, which is why supporting your liability insurance with events insurance is especially important. For example: if someone slips and falls on the stairs of your venue, you could be liable for their injury.
3. Product Liability
Product liability insurance is in place to your company from a third party based on the product it produces or distributes, in the event that the product causes injury to the consumer. This insurance is vital to automotive companies and others who distribute machinery that could result in serious harm if used incorrectly.
These companies may invest in a large amount of product liability insurance, whereas companies selling a product that is not deemed dangerous may only need a small amount of coverage. Unfortunately, you never know how a consumer might misuse your product and the potential is always there.
It is essential for your company to obtain liability insurance right away, especially if you are responsible for creating and selling a product that has the potential to be harmful. However, as a business, you can’t avoid accidents and potential problems, and having this insurance can give you piece of mind.
Though liability insurance can be expensive, and some companies are willing to take the risk of not having its protection, it is a wise investment for a small or growing company to protect itself from the will of the consumer.