The following is a guest post by Kelly Conway of Conway & Fleming Allstate Agency.
General liability insurance. The name alone implies that general liability insurance is an all-encompassing policy to cover the needs of your small business. However, this is can be far from the truth. Although liability coverage is absolutely useful, it may not be applicable to all types of risk.
Most insurance carriers offer specific forms of coverages separately, allowing business owners to purchase a la carte the protection they need. This allows you to avoid the cost of any unnecessary insurance products. Depending on your particular situation, you may need to purchase several types of coverage to fully protect your business. Often times, general liability insurance may not be necessary at all. Helping you to understand your options will help you make the right choices to protect your business.
So who needs General Liability Insurance?
General liability insurance protects your business from litigation in the event that someone sues you for bodily injury or property damage. In the highly litigious environment we currently find ourselves in, businesses are often an easy target for lawsuits. And, depending on the type of business you have, you may also be at a greater risk of exposure. The most common liability claims are a slip and fall in your shop, causing damage to a customer’s property while performing your services, or an employee slandering a client. For any of these scenarios, a general liability policy will provide compensation for the injured party allowing you to continue your business and keeping you out of court.
So do I need General Liability Insurance? There are a few questions you need to ask yourself:
Do you have customers come to your premises?
Do employees go to work in on-site locations?
Do you have access to property belonging to your clients?
If the answer to any of these questions is yes, then a General Liability policy is worth considering. However, it probably isn’t all you need to protect your business.
What else do I need to consider?
General Liability is designed to protect you in circumstances where you are liable to someone else for property damage or bodily injury. But what if something has to you, your stuff, or your employees? There are many products available to make sure that you are protected.
For you, AKA your business, an Errors and Omissions policy may be appropriate, especially if you are a consultant or any other type of expert. This coverage protects you in the event a client gets poor results after following your advice. Just as a doctor is required to carry malpractice insurance, other industry experts should carry E&O coverage to protect against any mistakes or errors made in the course of business that result in an impact to the client.
Next, your business has stuff: computers, furniture, tools, equipment, vehicles, etc. How the stuff is used will determinate which coverage is appropriate. Equipment that moves to and from a job site is better suited for an equipment or inland marine policy. Otherwise, a Business Owners policy that couples general liability with business personal property coverage is available.
Lastly, what about your employees? How do you protect them if they are injured on the job? Texas is one of the only states that does not require business owners to carry workers compensation insurance. In other states, you cannot even operate a business without having this insurance. That doesn’t mean you are not responsible in Texas if someone is injured on the job. A major injury or death of an employee could result in a lawsuit that leads to the demise of the business.
So how do I know what I need?
First, you need to know your business. This seems like it should be easy but I can’t tell you how many times I have been in a meeting with a business owner and they are not able to answer my questions. You need to know how much business property you have. This would include buildings, inventory, equipment, computers, furniture etc. You also need to know your current and projected revenues as well as number of employees and payroll.
Second, find an agent that understands your industry. The agent that insures your home and auto may not be the best person to insure your business. Talk to other companies in your industry to find out who they work with. Also, try to find an agent that can access multiple carriers. An exclusive agent may not be able to provide the best coverage and price as compared to a broker.
Lastly, think about what keeps you up at night? This is the question I ask all of my business owner clients when we meet. This helps me to understand what the risks really are in the business. There may or may not be a product that can protect against this risk, but at least we can work towards finding a solution in the many lines of small business insurance.
Still wondering how certain business insurance policies can protect your business beyond general liability insurance? Read How Business Insurance Protects Your Company in These Common Situations.
For additional questions on business insurance policies or general liability insurance, contact Kelly Conway at Fleming & Conway Allstate agency:
Kelly Conway, CIC, CRM
Fleming & Conway Allstate Agency