Commence insurance talk! At this point, you’ve already formed your business (or are about to) and the elusive and scary topic of insurance creeps into your mind. Well, you’ve come to the right place! This article will give you a quick rundown of general liability insurance, insurance brokers, and a quick note for employers regarding workers compensation insurance. The goal is to give you some peace of mind when confronted with these topics. Let’s begin.
General Liability Insurance
General liability insurance is designed to protect your business from financial loss by certain wrongdoing that you and your employees may be liable for. Financial losses can include those resulting from property damage, personal injury, or advertising injury. Such policies are only for non-professional businesses.
An example of when general liability insurance would be used is the classic slip-and-fall scenario. Say you own a small restaurant and one of your employees spills some water on the ground near the bathrooms. Now say a customer slips on this water before it has been cleaned and therefore becomes injured. The customer decides to bring a claim against you. Now what? *Enter general liability insurance.*
Your business may also want to consider other forms of insurance in addition to general liability insurance. Additional policies can include director and officer liability, errors and omissions (“E&O”) insurance, property insurance, product insurance, and employment practices liability insurance.
Recall: if your business is offering professional services, then there are likely separate policies for your profession. Reach out to your lawyer peeps if you need some guidance!
Employers: Workers Compensation Insurance
As we’ve discussed above, most types of insurance are optional (at your own risk). However, workers compensation insurance for employers is mandatory. For more on this topic, see our article here.
With growing reliance on technology comes greater instances and risk of data breaches. We all have seen it in the news. As such, it might be a good idea to get a cybersecurity insurance policy if you’re doing a lot of business online or utilize technology for sensitive information (as most of us do). Read more here.
We know what you’re thinking, “Do I need general liability insurance?” The simple answer is that insurance is, in most cases, a very personal decision that you will need to make based on your own cost-benefit analysis. This analysis will depend on your risk tolerance. Some things to consider are:
- How risky is the work I’m doing?
- How many potential clients/customers will I interact with?
- Do I have the budget to pay an insurance plan? If not, when will I?
- In my profession or service industry are there requirements for me to hold insurance?
Once you have determined if you should get insured, then the question becomes how much coverage to get. Again, the answer depends upon your answers to the above questions. In some cases, you may only need minimal coverage.
In addition to talking with your lawyer, your business may want to work with an insurance broker. An insurance broker can help you navigate your insurance needs at (typically) no additional cost to you. This can be a good option if the idea of insurance sickens you to tears. Don’t worry, no one will judge you. We know your pain.
The Bottom Line
The moral of the story is that insurance is a good option that most people would recommend, but the decision regarding the need for and amount of insurance is entirely up to you (in most cases). However, discussing your insurance options with your lawyer peeps and an insurance broker may ease your mind and make the insurance gamble more palatable.
By: Zachary Avina – 03/19/18
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