Protecting Your Assets with Small Business Liability Insurance
Owning and managing a small company includes lots of responsibility and responsibility. Even if you run with the utmost caution and supply the best quality and solutions, the unexpected can occur - an crash, an injury, a mistake, a misunderstanding that escalates. Is your business protected with liability insurance? Otherwise, your business and personal assets might be in danger. Who Needs Business Liability Insurance?
It's very likely that you just do, as we are living in a litigious society. Annual premiums range from $750 to $2,000 depending on your line of business and coverage requirements. That's certainly a lot less than the thousands, or even millions, of dollars you may need to pay fighting your case in court. General liability insurance can be purchased on its own, but it may also be included as part of a Business Owner's Policy (BOP) which bundles liability and property insurance coverage to a single policy. In case you have a BOP, check it to find out exactly what your liability policy limit is. You might find it is fairly low, in which case you might need extra coverage through another policy. Does an LLC Need General Liability Insurance?
You, as a business owner, may be held accountable ("accountable") for items you do while doing work for your limited liability company. For example, your LLC will probably not protect you if: - You injure somebody
- You personally guarantee a business loan or debt
- You don't manage your business taxes correctly
- You've behaved in an irresponsible or illegal way
- Rather than treating your company as another business entity, you mix personal and business accounts or expenses
The Kinds of Business Liability Insurance
There are several types of business liability insurance. Find out More about these: General Liability Insurance: This kind of business liability insurance is your principal coverage to protect your company from: injury claims, property damages, and advertising claims. General liability insurance also referred to as Commercial General Liability (CGL) might be the sole kind of company liability insurance coverage you need based upon your business situation. Much like many insurance plans, your policy will outline the maximum amount the insurance company will cover against a liability claim. So, if your small business gets sued for $250,000 for medical expenses related to an injury caused by a worksite hazard, and an additional $100,000 in legal fees, but your coverage maxes out at $300,000, then you're responsible for paying the difference of $50,000. Make sure you calculate your exposure and choose the policy that can protect you. Professional Liability Insurance: Business owners providing services need to think about having professional liability insurance known as "errors and omissions". This policy protects your company against malpractice, errors, negligence and omissions. Based on your profession, or a single contract, it may be a legal requirement to take this type of policy. Technology consultants often need coverage in independent contractor work arrangements. Product Liability Insurance: Small businesses manufacturing or selling products ought to be safeguarded in case of a individual becoming injured as a consequence of using the item. The amount of coverage and the level of danger is dependent upon your business type. A merchant of scrapbook supplies are going to have far less dangers than a wood stove builder.
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