Every business no matter how small has liability. Depending on the business operations and type of business risk, liability insurance can protect a business when an unforeseen event arises. There are many different liability insurance policies for a business to choose from and although in some states it is not required to have liability insurance it is highly advisable. LLC insurance can prevent the business from paying thousands of dollars in legal fees or settlements if a business is sued. The financial implications for a business being sued without liability insurance cover could result in the closure of the business.
What is General Liability Insurance and what does it cover?
General Liability Insurance is a comprehensive policy that protects a small business from a variety of risks. It is one of the most cost-effective ways to protect a business in the event of a lawsuit. Most businesses will require General Liability Insurance and the advantages it can bring to a business. The policy covers the following risks:
- Bodily injury. For example, if a customer slips and injures themselves on the business premises, the policy can help cover the associated costs.
- Property damage. Should an employee damage property of a customer, the business will be liable for the repair costs and the policy can cover that.
- Personal liabilities. This includes defamatory statements, copyright infringement, and invasion of property or privacy.
- Advertising liabilities. If the business places an advertisement that causes losses to another business or violates copyright, the policy can cover the damages from a lawsuit.
- Legal fees. Even if a business is not found liable when sued, there could still be exorbitant legal costs that the policy can cover.
Having liability insurance can also benefit a business in other ways. Some business contracts require general liability insurance and it might also be a stipulation in a lease agreement for commercial property. Customers are more likely to work with a business they can trust and a liability insurance policy tells the customer that the business cares about its assets. The business also appears to be more responsible and stable.
What other types of liability insurance could my business need?
Depending on the business operations, some LLCs might need insurance cover in addition to General Liability Insurance. There are many different policies to choose from and can be tailored to suit businesses’ specific needs. Some other liability insurance policies are:
- Professional liability. Protects a business in the case of malpractice lawsuits for professional errors.
- Workers’ compensation insurance. Covers medical costs and wages should an employee be injured at work.
- Employer liability. Protects the business in the case of employee disputes such as discrimination, harassment, or unfair dismissal.
- Cyber liability insurance. Covers a business in the case of a cyber-attack where a business’s database could be hacked and compromised.
Although there are many types of liability cover, in essence, it all protects the assets of the business. There are various risk factors that a business is unable to control, but having a liability insurance policy in place can provide peace of mind to a business when such risks occur. It is advisable to work with an insurance agent to assess the exact type of cover required. Many businesses will need additional coverage to the ones mentioned in this article and an insurance agent can assist with those decisions.
Where can I find an Insurance Broker?
An Insurance Broker is an intermediary between insurance companies and purchasers of insurance. They should not be confused with insurance agents as a broker acts with the best interest of the purchaser in mind. Agents are under contractual agreement and sell insurance policies. Below are some of the most well known and largest insurance brokers in the US.
- Marsh & McLennan Cos. Inc.
March is the world’s leading insurance broker. They operate in over 130 countries worldwide and have over 30 000 employees. Their annual revenue is almost US$ 17 billion.
- Arthur J. Gallagher.
The company started in Chicago in 1920. They have expertise in nearly every industry and use advanced analytics tools to assist businesses with their insurance requirements.
- BB&T Insurance Holdings Inc.
BB&T has been around since 1872 and is one of the largest financial services holding companies in the US. They operate more than 1,700 financial centers in 15 states.
- Brown & Brown, Inc.
They have been in the industry for more than 80 years and is the 6th largest independent insurance brokerage in the US. The company’s headquarters are based in Florida.
- HUB International
HUB is considered the 5th largest insurance broker in the country. They have over 475 offices nationwide with their headquarters currently based in Chicago.
- USI Insurance Services L.L.C
With almost US$ 2 billion in revenue and over 200 offices nationwide, USI has become one of the industry leaders in the insurance industry.
- Lockton Inc.
Lockton is a family-owned organization with over 100 worldwide offices. They have over 60 000 clients and claim to have a 96% client retention rate. Their headquarters are currently based in Kansas City.
In some cases, a business will elect to self insure. This means putting money aside each month equal to the amount the business would have paid for insurance premiums. The money is then used when an unforeseen event occurs. However, it is not advisable to use this method for liability insurance as the risks are too great and can not be controlled.
In other words, if there is a business, there should be liability insurance. A business that cares about its assets will protect it and that is exactly what liability insurance does. No business owner wants to lose their business due to the cost of a lawsuit if it could have been prevented. Liability insurance is therefore a must for any business.