Business liability insurance provides protection against lawsuits and claims of negligence on the part of your business. It’s different from other types of insurance because it covers you in the event of a lawsuit, not against any specific type of loss like fire or theft.
Professional Liabilities Insurance is a crucial component to running a successful small business, but many people are confused about what it does and how much coverage they need—never fear! We’ll walk through everything you need to know about this important coverage so that you can ensure your company stays protected.
What is business liability insurance?
Business liability insurance covers legal expenses. It pays for the cost of defending against a lawsuit, criminal allegation or government investigation.
If you’re sued for something you did wrong as a business owner and lose, this coverage will protect the money you have to pay out in damages. In addition to covering lawsuits, it also covers fines and settlements from investigations into your business practices.
This type of coverage is especially important if you have employees working in dangerous conditions, who could be subject to workplace injuries that lead to lawsuits against your company. It’s also extremely important if your product causes harm or injury—you may want to read up on Public Liability Insurance Nz before deciding whether or not this kind of policy is right for your business needs.
What does business liability insurance protect against?
Business liability insurance protects your business from losses caused by lawsuits, personal injury claims and property damage. It also covers advertising liability, errors and omissions (E&O), malicious prosecution, and defamation.
Business Liability Insurance: Coverage for the following events:
- Lawsuits involving products or services provided by your company
- Personal injury claims are filed against employees who are on the job or who were hired to perform a service at a client’s location…such as a delivery person getting into an accident while making deliveries for you.
- Property damage resulting from work done by your employees on behalf of clients…for example a plumber fixing someone’s sink breaks it instead and they sue you because their clothes were ruined in the process.
How much business liability insurance should you have?
The amount of business liability insurance you need is dependent on several factors, including the type of business you’re running and your assets.
There are some general guidelines that can help you determine how much coverage to buy. For example:
- If the company has less than five employees, then typically only basic general liability insurance is needed. This covers accidents involving customers or any other third party while they’re on your property (like if someone trips over an electrical cord).
- If a company has between five and 50 employees, it’s likely a good idea to get additional coverage above just basic general liability insurance—for example, if one employee injures another employee in a workplace accident or if an employee steals money from the company. This would fall under professional liability and could be costly for small businesses without adequate coverage.
- If the company has more than 50 employees who work offsite at different locations throughout the day or week (such as construction crews), then hire-purchase agreements may be necessary in case equipment breaks down unexpectedly during work hours—or even worse: malfunctions during transport which causes injury or death due to negligence on behalf of both parties involved with transporting goods around town.”
Conclusion
In summary, Business Liabilities Insurance is a smart addition to any small business owner’s arsenal. It provides protection against costly lawsuits and other legal costs.
However, it’s important to know exactly what your policy covers before signing up for one or starting a new venture. If you have questions about how much insurance coverage would be right for your company, consult with an experienced professional who can help find the best fit for both parties involved.