Proper management of uncertainty is a critical success factor for businesses of all sizes. Not only can it help avert potential financial loss, but it also lets you work with peace of mind. The first thing you should do is get the right business liability insurance in California to maximize your protection against the unforeseeable. Read on to learn more about practical liability coverage applications and requirements for small businesses.
Choosing Your Business Liability Insurance Policy
General liability insurance covers your business against events or claims such as:
- Bodily injury, for example, a shopper who injured their leg after a slip and fall in your store
- Damage to a client’s or another party’s property caused by you or your employees
- Defamation claims brought against your business
Liability insurance can cover lawsuits, medical costs, or settlements arising from these incidents.
3 Occasions When You Will Need General Liability Insurance
Liability protection may be mandatory in the following three scenarios:
- Clients or other companies require you to have it to sign contracts
- The owner of your rented business space requires it
- You’re applying for a professional license
Estimating Your Liability Insurance Coverage Needs
The amount of liability insurance you should get depends on your specific business needs. You can estimate it based on factors like:
- Your type of business/industry
- Number of employees
- Your business location
- Your insurance protection requirements
- Specific policies or add-ons to be included in your GL policy
Information Required to Obtain Liability Insurance
Generally, your potential insurer will analyze relevant information to determine the amount of risk your company faces. They will be interested in details such as:
- Your business type
- Years in business operation
- Coverage history, including insurance claims and previous or existing policy
Common Liability Insurance Exclusions
GL insurance doesn’t cover every type of business liability risk. You may need special policies for protection against claims such as:
- Workplace injuries or illnesses: You need a separate workers’ compensation insurance policy for this liability risk, which will cover medical bills, lost wages, and other damages your employees may incur after falling ill or getting injured at work.
- Third-party property damage in an accident involving your business vehicles: Only a commercial auto insurance policy may cover your company vehicles during business-related work.
- Employment-related claims: For coverage against claims of sexual harassment or wrongful termination, you should get employment practices liability insurance.
- Professional errors: GL policies do not cover claims filed by clients regarding unsatisfactory services. Consider getting professional liability insurance if you’re a service provider, such as a financial advisor.
Does My Small Business Need Liability Insurance?
Some liability claims are severe enough to bankrupt or destabilize an otherwise successful small business. If you haven’t made up your mind about getting insurance protection, consider these statistics:
- About 40% of small businesses might experience a property damage or liability claim in the next ten years
- A general liability claim against your company could increase by $75,000 if you’re sued
With business liability insurance in CA, you can minimize the financial impact of many unforeseeable loss-causing events. Contact us at Modab Insurance Services today for assistance in selecting the right liability policies for your small business. We can help customize your coverage based on your needs and budget.