What types of insurance should a small business have?
Are you a local handyman or contractor? Are you looking to start a new small business or increase protection for your existing business? Not sure what kinds of insurance you need, if any? Full disclosure: Commercial insurance is an overwhelming topic! Stress no further because Ryan Thoma Insurance is here to help.
Commercial Insurance-General Liability
Generally, any type of small business needs some sort of commercial insurance to protect the business and its owner/s. It is important to purchase the right types of insurance for each individual business. It would not be beneficial to purchase coverage that is not useful for your line of work, but could be detrimental to the business if the necessary coverages are not in place. Several types of commercial insurance policies are available to business owners, along with various coverage options to customize each policy. Minimally, all businesses should carry a general liability insurance policy. Unfortunately, lawsuits against small businesses are prevalent in today’s society, whether warranted or not. General liability insurance is designed to help prevent businesses from going under, due to costly claims and lawsuits against them.
A general liability insurance policy can benefit ALL businesses. No matter the line of work or size of the business, everyone should protect their business (and themselves) from potential claims. General liability insurance provides coverage for bodily injury, property damage, product liability, and personal and advertising injury claims against your business. For example, a customer, client, or tenant slipping on a loose step at your business and becoming injured in the process, could result in a claim being filed against your business. You may be found liable for the accident and injuries. General liability insurance can help cover the costs for investigating and settling the claim, court costs, and medical expenses. Without general liability coverage, these expenses would come straight from your own pocket. Hope yours are deeper than mine!
Examples of General Liability Claims
Imagine you are a contractor, beginning work on your latest project. One of your drivers becomes distracted and accidentally backs your work truck into the neighboring business’s main building, producing extensive exterior and interior damage to the building. Not only are you now probably dealing with your own problems, regarding the damaged truck and culpable employee, but you are liable for the neighbor’s property damage as well. General liability insurance will help cover the costs necessary to settle the claim and repair the building back to its original state.
Does your business manufacture some type of product that is distributed to consumers of the world? Do you own a restaurant or local grocery store? If so, then your business can benefit from product liability coverage, which is included in a general liability policy. Product liability coverage helps protect your small business from claims that your product or food has harmed someone else. From food poisoning claims, to injury arising from use of a product, the purpose of product liability coverage is to protect businesses from financially disparaging lawsuits against their products.
Personal and advertising injury coverage is probably most confusing of the general liability coverages. This provides coverage for false arrest or imprisonment, malicious prosecution, wrongful eviction or entry of a private occupancy, and libel or slander. You may be thinking, “What?! I would never!” And I’m sure you wouldn’t intentionally commit these acts. Insurance is designed to protect the insured from unexpected and unplanned catastrophic events. Clearly, a business owner would never plan to hold a customer or employee captive, trespass on someone else’s property, or defame someone else’s name or business, but consider the following scenario:
You are the owner of a small retail shop, closely monitoring the store for theft. You are positive that you spotted a suspicious customer pocketing merchandise. After confronting the customer, who denies any wrongdoing, you insist that the alleged thief stay put until the police arrive. Once police arrive and the customer is searched, it turns out that no merchandise is found and the customer is innocent. Because of this misunderstanding, and your protecting of your business assets from potential theft, you are now at risk of being sued for false imprisonment.
General liability insurance can be a complex topic, but it is a definite necessity for any small business. If you are interested in protecting your business and livelihood, then contact a local insurance agent for quotes. Do NOT leave it up to chance! If nothing else, general liability keeps your financial assets safe from customers or clients wanting to dip into your pocket at the slightest opportunity. Expect the unexpected, or risk finding yourself wishing you had!