All small businesses should carry some form of a commercial liability policy that can cover bodily injury, property damage or advertising injury claims.
This type of policy can apply to small home-based businesses or larger businesses that may have several locations. This insurance also covers medical expenses resulting from bodily injury caused by an accident on your property or as a result of your operations.
For example, we have all seen a news story or two about people getting sick after eating at a restaurant. If the restaurant is found guilty of distributing the food that caused the illness they will have a series of claims on their hands.
If you manufacture or sell a product, you also need liability coverage to protect you from any damages your customers may incur as a result of the products you provide. In my experience, I have seen small businesses exposed because the liability for the products that you complete remains with your business. For example, if you own an Auto repair shop and you return the car to the owner after fixing the brakes. At the first stoplight the owner presses the brakes and the brakes do not work. There is an accident and several injuries. The Auto body shop is liable for the losses as they did not properly complete the brake repair.
Your policy will have limits on what is covered, but it should provide supplemental payments for attorney fees, court costs and other expenses associated with a claim or the defense of a liability suit. The cost of a policy can vary, depending on the type of business you own and the probabilities of your exposure to risk as well as other factors including deductibles, etc.
Most business owners don’t realize, however, that the price of a policy can vary for similar coverage because of the insurance company itself. Insurance companies set their rates according to a set of factors that include actuarial tables, company overhead and investment returns. So it’s more important than ever to shop around to find the best agent who can help you select the policy that you need. You should view your agent as more than a vendor, but as a very important indirect member of your business. In addition to developing a consultative relationship, you should expect great customer service. At the start of the relationship, your agent is there to provide you the policy that will protect your business – and if you ever need to draw on the protection of that policy, your agent should be there to help you access the financial benefits you purchased.
