Small business liability insurance protects personal and trade assets should there ever be a legal suit brought against the owner. Unfortunately, the chances of getting sued have risen significantly in the last several years. Small businesses that have liability insurance can prevent a legal action against personal or trade issues from becoming a financial disaster. As with any contract, it is important to understand all the terms of service before signing.
This type of policy can be purchased separately from traditional policies, which covers property and assets, or can be purchased in a bundle known as a BOP or business owners package policy. BOPs offer simple small businesses that have liability insurance and property packages for small and medium sized establishments. An owner can purchase BOP coverage individually, but it is generally more cost effective to bundle coverage with specialized options. A BOP is especially applicable for those that operate in more than one location or manufacture products outside the home. BOP can cover gross sales of up to $3 million dollars and has special features and pricing that make it a good value for operating wholly or partially from the home.
However the owner decides to purchase a policy, pay careful attention to the details included and the amounts. The policy should cover a broad range of protections, including bodily injury, property damage, product and contractual liability. Ask whether legal fees are covered by the small businesses that have liability insurance policy and if so, how much? Next, determine what level of small business liability insurance you need. To obtain a reasonable figure, ask other owners in the industry what coverage they carry or look at the recent legal actions and settlement amounts in a particular field. This type of coverage can help protect an establishment from potential devastation due to lengthy and expensive litigation. Many owners faithfully insure their assets against potential disaster caused by fire or other natural means. However, the threat of having a legal suit brought against a company is much higher than it being struck by a natural disaster. Make sure the assets are protected with adequate small business liability insurance. "Teach me good judgment and knowledge: for I have believed thy commandments." (Proverbs 119:66)
An owner can generally save the most by bundling it with other coverage with the same carrier either via a BOP or other package. Also, consider joining a trade association. Many trade associations and entrepreneurial groups offer discounted coverage to smaller businesses that have liability insurance as a benefit of membership. Finally, enlist the services of a specialist broker. A specialist can better help accurately determine what type best meets the needs of the establishment and can help find the best rate.
9/23/08
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