Businesses are prone to emergencies or catastrophes which drastically affect their cash flow. It doesn’t really matter if the business is big or small: what is important is whether the business owner is ready for such unfortunate circumstances. Insurance works as a cover and protects cash flow when a huge setback occurs. In layman’s terms, if there’s a financial loss or a work-related injury, the insurance company will cover the expenses incurred.
Business liability insurance is a must for any company that wants a safety net to protect them from sudden financial problems. Having a liability insurance plan is not only a good investment but a wise move for any business owner. The three main types of business liability insurance are:
General Liability Insurance
This helps you protect your business against bodily injury claims, advertising injury claims and property damage claims. Claims can range from a few dollars to thousands, which could cause your business to stop operations. For example, say a customer falls on the floor of the store after one of your employees mopped it. The accident causes the customer a sprained ankle or, worse, a broken hip. The medical bills may cost a fortune, and because the accident happened within your business premises, the customer may demand that you cover the cost, or sue you. In this situation, general liability insurance will come in handy.
Professional Liability Insurance
If you provide services or advice to a customer, you need to focus on professional liability insurance. It protects your business against errors and omissions. This is the reason why, in the US, this type of insurance is commonly called “E&O”. It protects your business against acts of negligence when your services don’t meet the expectations of the customers. It basically involves coverage relating to defense costs, copyright infringement, personal injury and alleged negligence or inadequate work.
Product Liability Insurance
This coverage is useful, and necessary if you sell or manufacture products. It protects your business against claims in case the products are defective and cause injury to the customers. Such coverage safeguards you against safety claims, indemnity costs, manufacturing quality and spoilage.
Always research what kind of insurance you need for managing your business. If you’re concerned about the cost, you can reduce insurance premiums by taking quality control measures — and when you weigh the potential cost of a claim against the price of the premium, the financial advantages are clear.
To know more about business liability insurance, contact us now!