Understanding Small Business Liability Insurance Plans

Modern society is a litigious one, which is why you want to make sure you have adequate small business liability insurance. This insurance can protect you from a lawsuit that is the result of bodily injury on your premises as a result of negligence by yourself or an employee or as a result of property damage by yourself or an employee.

There are five types of small business liability insurance.

1. General Liability Insurance

This is the most common small business liability insurance, and is usually sold as part of a complete business insurance package. It provides coverage for property or injury that is a result of negligence by you or your staff.

2. Occurrence Policy or Claims Made Policy

When you buy your small business liability insurance you can choose from either an occurrence or a claims made policy. An occurrence policy covers claims at a later date. It can be months or years after the incident happened. The insurance company is legally obligated to review and pay any legal claims even when reported at a later date.

The claims made policy is the most common and it protects against claims made while the policy is in force. The policy can also be underwritten to cover a specific period prior to the current policy. Claims made policies have premiums that are significantly lower than occurrence policies.

3. Professional Liability Insurance

Professional liability insurance is designed to provide small business liability insurance right up to large organizations and is essential if your business is in the service industry. Professional is broad term that can range from your local plumber to the surgeon at the hospital.

Insurance covers things like errors and omissions insurance carried by accountants, contractors, and attorneys to malpractice insurance carried by doctors. Talk to your agent and make sure all your professional liability needs are met.

4. Product Small Business Liability

This type of liability insurance protects against accident, injury, or death that are a result of items you manufacture or that were developed by your company. The type of product you manufacture would dictate how much coverage you need.

5. Small Business Liability Against Employee Action

This is the latest type of liability insurance to be offered. It protects employers from action taken by employees in sexual harassment, discrimination, and wrongful termination.

Who Needs Small Business Liability Insurance?

More than 75% of all businesses in the United States are a partnership or proprietorship, which puts your business and personal self at risk. Small business liability insurance protects you and your business from financial ruin.

Most small business liability insurance plans will meet your company’s basic liability needs. Some general liability policies will also cover slander, libel, and infringement of intellectual property so ask your agent or read the fine print thoroughly so you know what you are covered for.

However, it’s important that you read the fine print of your policy to find out where your policy is lacking to meet your exact needs, and then speak with your agent to ensure you have adequate, well rounded coverage.



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