To fully understand the purpose of business liability insurance, you must learn about the definition, its importance, and the different types of business liability insurance.
Being a responsible business owner, you should be well aware you’re different responsibilities as well as the risks. Even though you think that you handle your business pretty well, it may not always be the similar perceptions with some customers. All businesses, most importantly those which are small-scale must be protected with insurance in the events like personal injury or property damage in relation to your products. Get to know what this business liability insurance is.
Definition of business liability insurance
Business liability insurance gives protection to your small business when a lawsuit due to property damage and injury is filed. The insurance would cover the costs from the damages. Business liability insurance is available in different options which cater your business needs.
Importance of business liability insurance
According to statistics, most American businesses are either run by partnership or sole ownership. This type of handling may be risky for small-scale businesses and personal liabilities. With business liability insurance you can give security to your business and personal life from financial losses. Most business owners have a misconception that an incorporated company protects a business owner from personal liability and liability insurance may not be needed. However you can still be liable if you commit injury to someone, you are operating your business as a single entity, you have signed a personal guarantee for a loan, and you have committed illegal acts.
Types of business liability insurance
There are three types of business liability insurance: general liability insurance, professional liability insurance, and product liability insurance. The features of general liability insurance protect your businesses from injury claims, property damages, and other claims. It is also known as a commercial general liability and is the only type of business liability insurance in which the needs are depending on the business situation. Product liability insurance on the other hand protects small businesses in the event when a consumer is injured by using the product. The coverage depends on the type of business you are conducting. Professional liability insurance protects business from errors, negligence, malpractice, and failure of responsibilities. It may be considered as a legal requirement to carry such a policy depending on your profession. For example, medical practitioners may require coverage to practice in several states.
To be able to run a successful business, a responsible owner should give protection to his business and his interests. With business liability insurance, you are now more confident in conducting your business.