Choose the Right Liability Insurance to Protect Your Business’s Future
Posted by Megan Webb-Morgan on May 22, 2013 in Business Insurance [ 0 Comments ]
According to the US Department of Justice, personal injury trials comprised nearly 60% of all tort, contract, and real property trials in 2005. These trials – as well as any settlements or damages paid – can cost hundreds or thousands of dollars.
If your business is sued, your liability insurance will cover the cost of the trial as well as any damages for which you may be held responsible.
Without the right insurance, you could end up paying a lot for accidents that aren’t even your fault.
Protect Your Finances
Most businesses are sued by a third party, such as a customer, client, or even a random passerby. Reasons for being sued include: personal injury (such as libel or slander), bodily injury, accident, or negligence.
- Your ad or press release contains misinformation about a competitor. Your mail carrier slips on your front steps and breaks their ankle. A customer walks into a shelf and is hit by a falling product. All of these situations present an opportunity for you to be sued for liability.
- Your liability insurance pays the cost of court fees and compensation up to the limits of your policy. This prevents your business from having to pay large sums to defend itself in court; after all, even if you win, you still have to pay the court and your lawyer. Liability insurance prevents your business from being disrupted during this process and handles all the fees for you.
Protect Your Special Events
Your business can be held liable if an accident occurs in your storefront, office, or business space. However, even accidents in outdoor or public spaces can result in your being held responsible for injury. If you hold a special event of any sort – employee picnic, trade show, etc – you should supplement your regular liability insurance with special events insurance.
- Your regular policy may not cover accidents that occur off-premise that could still be attributed as your responsibility. Check the details and limits of your policy and be sure to supplement with additional insurance when necessary.
- Many venues now require you to purchase special events insurance before they will allow you to rent their space. This prevents a legal battle over who may be ultimately held responsible for an accident – the venue, or the host (your business).
- Special events insurance is absolutely necessary whenever alcohol is consumed. If someone commits a DUI after attending your event, your business could be fined or held accountable, especially if an accident occurs.
Protect Your Products
If you create or manufacture products – especially food products – you should look into product liability insurance. This protects your business should an injury arise from the use of your products.
- The cost of this insurance varies with what kind of industry you’re in – the apparel industry has far less risk of injury than electronics or consumables, and that will be reflected in the cost of the insurance.
- Insurance for food products varies considerably. You can get policies that protect you from the costs of spoilage due to equipment breakdown or power outage, and policies that protect your food while it is in the process of being delivered. Due to the risks of bodily harm inherent in food-borne illnesses, you should at the very least purchase a basic product liability policy.
The cost of liability insurance for the life of your business, even for special policies like product liability or events, is still going to be less than the payout should you be held responsible for an injury, accident, or other damages. Furthermore, liability insurance offers you peace of mind – if you get sued, even erroneously, you won’t have to front the money for a defense or pay court costs.