Small business liability insurance offered by the insurance companies protects the asset of the small business. The small business liability insurance defends the small business if there is any lawsuit for damage to property or personal injury. The insurance generally covers the damages occurred from a lawsuit and also the legal costs.
If the small business is structured as a partnership or sole proprietorship, the business itself or personal liabilities of the proprietor may be at risk. The small business liability insurance assures to protect both the business and personal life of the proprietor from any financial crisis.
There are various types of small business liability insurances available. Depending on the business needs, liability insurance should be purchased.
Types of Small Business Liability Insurance:
General Liability Insurance
Professional Liability Insurance
Product Liability Insurance
The general liability insurance coverage mainly protects the small business from property damages, injury claims and advertising claims. General liability insurance is also known as Commercial General Liability (CGL). The professional liability insurance is mainly mandatory for those small businesses providing services. This coverage defends the business from malpractice, negligence, errors and omissions. Depending on the type of the profession, having professional liability insurance may be a legal requirement. For example, technology consultants and doctors often need this insurance in order to practice. The product liability insurance is useful to businesses that manufacture and sell products. This insurance is necessary in the events if someone is injured by using the product. The amount of coverage in this insurance depends on the business type.
After the September 11 terrorist attack and stock market fallout, the insurance costs have increased considerably while providing less coverage. Hence getting a suitable small business liability insurance policy may not be easy. If the small business belongs to any trade association or business group, it may get the benefit of purchasing insurance at group rate. For example, the members of Chamber of Commerce enjoy the privilege of buying insurance at lower rates. Assessing the industry�s settlement can also be useful to gain a better insurance policy. The business liability coverage extent varies from one insurance company to another. It�s necessary to compare the various policies provided by the companies in order to have the best deal. A specialist broker having knowledge of the insurance market can be useful to have a better insurance deal.
Last Updated on : 29th July 2013