Get Fully Protected with Liability Insurance
When it comes time to take your business to the next level, one of the most important considerations you are likely to encounter is liability insurance. Keep in mind that general liability is not the same as professional liability, so it’s particularly important to understand the value – and limitations – of each in order to ensure that you are protected.
General Liability Defined
General liability is exactly what it sounds like…general. Essentially this is the type of coverage that provides protection against liability claims or lawsuits a business owner may encounter through the normal conduct of business. It typically covers operations, the premises and other actions that take place on the premises of a business property, but it typically does not cover additional losses that might arise from the original problem.
Professional Liability Defined
Professional liability is typically associated with the practice of law or medicine or other “professional” types of activities that may result in personal injury, death or property damage due to fraud, negligence or omission by a professional.
What Type of Insurance Is Needed?
Many professionals require both general liability and professional liability coverage in order to provide full protection against possible lawsuits. While most people assume that attorneys and physicians require extensive professional and general liability insurance, it’s increasingly common to find others professionals who would benefit equally. Massage therapists, beauty salon owners and even veterinarians are just a few examples of professionals who could benefit from both forms of coverage.
As a general rule, if your business uses retail space or an office location to provide services, it’s a good idea to investigate general liability insurance. A simple slip and fall could cost much more than the annual premiums required to provide protection for you, your company and your clients.
For those who have invested a considerable amount of time, training, education or other skills in their careers – or those who hold a license, certification or other mandatory recognition in order to perform a job – professional liability insurance is essential. Not only does it provide clients peace of mind knowing that you adhere to the highest standards of conduct, but it is also an affordable way to protect your hard-earned income against expensive lawsuits.
What about Contractors?
Business owners who routinely use independent contractors or other highly specialized services should insist on professional liability insurance that includes errors and omissions as well as general liability insurance prior to hiring subcontractors. This coverage is designed to provide your company with protection against damages resulting from work performed by a subcontractor, including loss of operating revenue or other losses.
Is it Really Necessary?
Business owners are often tempted to go without proper insurance, but research shows that a lawsuit – even an unfounded one – is often enough to bankrupt a company or even place the private assets of the owners at risk. Be sure to ask whether coverage includes the following:
- Legal defense funds
- Employees and subcontractors
- Personal injury coverage
- Worldwide protection if you do business outside of the US
- Intellectual property if you work with software, technology or other forms of intellectual property