Execution and smooth operation of a business can be quite difficult to achieve. The larger the size of the business, the more difficult accomplishing this can be. One way to guarantee smooth operation of your business is to invest in insurance.
Any profiting company purchases some form of insurance to protect their assets and stay afloat in case an unexpected, unfortunate event occurs. The type of insurance in this scenario is known as commercial liability insurance. Virtually every type of business is susceptible to damage in some way. If you are looking to run a business, you should consider it mandatory to purchase an insurance plan. However, first you will need to understand what will be covered with commercial liability insurance.
Among liability insurance, there are numerous types of liability that are present. Basic liability insurance usually comprises of General Liability Insurance or GLI. General Liability insurance as the name suggests will protect you from typical loss such as any damage to assets or property as well as injuries to people involved with the business. Besides, the actual cost of these losses, the primary purpose of this insurance is protection in case of a lawsuit. We’ve heard numerous stories of companies going through a financial struggle after a lawsuit resulting in a massive settlement. If you are a small business owner, you may assume that you will be immune to such lawsuits; however it has happened in the past. Don’t take a chance.
GLI should be considered in virtually every scenario. If you retail or own as store where customers are involved and interact with the company, having GLI would protect you from any angry customers. If your company works with other people or expensive assets, a GLI should be considered. These are just two examples, however in general; virtually any type of business, small or large should invest in GLI. While GLI takes care of all general aspects, it may not be sufficient.
In any businesses, mistakes happen. While companies strive to work like clockwork without any issues, there are situations where some sort of failure occurs. This can be very costly for the company depending on the type of mishap that occurred. This is particularly important when providing services. Protection from such scenarios can be acquired by purchasing Professional Liability Insurance. Professional Liability Insurance will provide compensation in case services don’t perform as advertised or fail for some particular reason.
You may be finding it hard to justify the purpose of investing in General Liability Insurance and Professional Liability Insurance. Let’s consider an example to better understand the need for these two types of liability insurance for businesses.
Supposing you own a store that specializes in computers. You provide services such as computer equipment as well as solve issues with computers. Supposing a customer who visits your store happens to get entangled in an exposed cable resulting in him tripping and falling. He finds himself in need of medical assistance where it is deduced that he has been seriously injured and will need to rest for a couple of months. This can result in loss for the customer in numerous ways. Apart from having to rest at home and stay away from work, the customer also has medical bills piled up following the incident. In such a scenario, while it is clearly an accident, the blame would be on your company.
In this situation, a customer would most likely sue and rightfully so considering the amount of damage and loss being inflicted in the customer. The compensation for the customer can amount to a relatively large figure which can hurt your company’s profits. If you have GLI however, all these costs will be taken care of.
Supposing you have invested in GLI and compensation has been made thanks to your policy, things can still go wrong. An employee may accidentally lose an important piece of data from a computer given by a client for service or the computer may malfunction after being serviced by your company. while the issue may not have particularly be caused by your employees, it would seem that way resulting in more compensation having to be made. These types of losses are not covered in the GLI which is why Professional Liability Insurance should be considered.
These are primarily the two main types of liability insurance available if you intend to have cover for your business. Before making an investment, be sure to adequately research various options. Insuring a business irrespective of size can be relatively expensive. Make sure you make the right choice. There are also certain insurance providers that specialize in small businesses. Choosing such companies may be more advisable as policies will be fine-tuned and perfected to provide comprehensive cover for your business.