If you own a business, the costs of a lawsuit could cost you everything; in an effort to cut operating costs, many may fail to go without liability insurance, figuring their chances of being sued are low. But, in a world where frivolous claims and sue-happy people are rampant, it would be foolish to think you do not need that protection just in case. Here are some important considerations for purchasing this all-important protection for your business.
Look into Trade Association Memberships
In many instances, you can purchase products and services at a discounted rate through membership in some sort of organization. When it comes to liability insurance, belonging to a trade association relevant to your business may help you get better rates; this type of membership may also other benefits to your business so it is something worth considering regardless.
Look for a Broker that Specializes in Your Industry
Different industries have different needs when it comes to insurance and other types of products; they each also face unique challenges and have unique concerns. When shopping for liability insurance for your business, you should look for a broker that specializes in your industry. His knowledge of your type of of business and the risks it faces will help guide you in putting together the best policy to meet your needs at the best prices.
Examine Industry Settlements
When deciding on the proper amount of coverage, it is important to have an idea of what type of money you may be looking at should you get sued. Take a look at recent legal actions and settlements against businesses similar to yours. This will help you get an accurate estimate of how much money you would need to fully protect yourself.
Consider a Combination Policy
Liability insurance is not the only type of coverage a business should have. Maintaining separate policies will often result in paying more in premiums than you need to. But, when going this route, it is important to have a full understanding of what is included and what is not. These policies do not typically include all types of business insurance you are interested in purchasing. Examples of what is typically included besides general liability are property, business interruption and business vehicles.
Errors and omissions insurance, also called professional liability insurance, needs to be purchased separately. While general liability insurance is designed to cover things such as injury or property damage, this type of coverage is designed to protect against claims of professional negligence in which a customer believes your services caused them a financial loss.
Check Coverage Periodically
Your liability insurance is not just set it and forget it; as your business grows, it is important to carefully review your policy each year to see if any changes need to be made. After working so hard to build your business, you would not want to risk it because you failed to upgrade your coverage. If you feel you may need to make changes, contact your broker who can offer you sound advice.
About the Author: Kelli Cooper is a freelance writer who blogs about a variety of business topics; if you are in need of liability or other types of commercial insurance in Canada, she recommends you visit Kanetix.ca.