What do you worry about most as a small business owner?
While getting a good return on your investment, paying business taxes and meeting customer service needs may likely top your list, do you worry about ever being sued? If the answer is yes, do you have the right insurance plan in place to protect you and your business?
A general liability insurance plan is the most basic coverage, yet it can still protect you and your company in certain situations.
According to Bizstats.com, more than 78 percent of all U.S. companies are set up as a partnership or sole proprietorship. In the case of many small businesses, this structure places either the man, or woman, running the business and their personal liabilities at risk. With the right general liability insurance coverage, business owners can lessen the chances of being put in a precarious legal situation.
In basic terms, GL coverage protects you and your company against things such as property damages, claims due to injury, and advertising claims. It will also cover you for any necessary legal costs instituted to defend you.
Among some examples where you would need to file a claim or someone could potentially sue you and your business:
- Your office property is damaged or stolen, including if you rent the property and the landlord wants to be reimbursed for damages from a fire, weather act or burglary.
- A client is injured onsite while conducting business with you.
- Something that goes out online or via another form of communication falsely advertises information about an individual or other business.
Reduce Your Liability Risk, Review Safety Procedures
In order to reduce your risk to such potential financial nightmares, there are things you can do in the workplace to reduce the chances of a liability. They include:
- Make sure proper safety features are in place in your office, meaning for both your employees and customers. Such practices would include proper lighting and sidewalks, fire and burglary alarms, office equipment that is well maintained and details the necessary safety features to be used, and reviewing all communications that will go public, meaning there are no copyright issues or statements that could present legality issues.
- Review safe practices with employees on a regular basis. This not only includes physical things around the office, but also in communications sent, especially in today’s Internet age.
- Review your hiring processes, meaning you are not opening yourself up to possible lawsuits by hiring someone whose past is questionable.
When you go looking for coverage don’t just get one general liability insurance quote, get several to compare and contrast.
Take the time to not only look at the prices for coverage, but the company’s background, whether or not is has a solid record of customer service and a low number of customer complaints, and its financial stability.
There is little doubt, however, that prices on premiums still sway most small business owners as to getting coverage in the first place.
Heading into this year, Conning reported that rates for GL coverage had started to increase following a prolonged period of decline. That being said, it was also stated that the impact of a number of years of strong market competition for the majority of GL lines, teamed with worsening loss frequency and severity trends, meant tough times ahead for those in the general liability insurance market.
Finally, while it is by no means mandatory, having all your company insurance plans with one insurer can make things easier and more affordable.
In many cases, insurers will offer you a discount when you bundle your coverage needs, plus you can then deal directly with one company.
If you’re opening a business down the road or just opened one, don’t take general liability insurance for granted. If you do, you and your business could be the big losers.
Guest Author – Abby Evans is a freelance journalist who covers small business, finance, and marketing.