Having liability insurance is important if you are running a business. Even a one person operation can benefit from having liability insurance for protection against litigation. The question then becomes, is cheap liability insurance worthwhile?

The difference between cheap liability insurance and expensive liability insurance may only come to light if you get in trouble. If you skimp on insurance and find you do not have enough when there is a problem, you will have an expensive answer. If you blow a bundle on expensive insurance you do not need, you are wasting cash you need for other parts of the business.

Research prior to purchase can be invaluable later on. Consult with your insurance professional and look at industry statistics for your type of business to help determine how much to pay for liability insurance. Any time you are in a business or consulting business and you need to enter someone else’s premises, you need liability insurance. If you have employees who work for you, you need coverage for their work. If you produce a product or make repairs, you need coverage for defects and errors. Liability insurance can cover you for quality, delivery, and protect you from litigation or disastrous court awards.

If you have cheap liability insurance, it may be adequate for your needs. If you do not have enough coverage for the work you are doing then cheap liability will prove to be too expensive. Having $10,000 is not good if you get into a court case and are found liable for $75,000 in damages. What you want to settle upon is the right amount of coverage for the work you are doing.

There is so much litigation today that it is inconceivable that a company would do work without proper liability coverage. Many companies will not hire a subcontractor unless they have their own liability insurance. To get work and to work confidently, be sure that you have enough liability insurance. Get cheap liability insurance at the minimum. Get the insurance and then take a second look to be sure you have enough liability coverage. If you do not have enough liability coverage the “cheap” will no longer be cheap if you get in trouble.

What about cheap car liability insurance?

You can find cheap auto liability insurance, but just like with commercial liability insurance, you want to be careful.  It’s one thing to find a good deal, entirely another to buy terrible, but cheap insurance.

Liability auto insurance is the most important car insurance you can have so make sure:

1. your coverage is adequate.  Get the most coverage you can afford.
2. you are buying from a financially solid company.  Check your potential insurance company’s credit rating at AM Best or Standard and Poor’s to make sure the insurance you are paying for will be there when you need it.

There are a variety of different problems that may face a company which delivers products to the market. Even the most well intended company will occasionally bite off a bit more than they can chew and cause a damage for which they are liable. This could be as simple as a moving company damaging someone’s furniture or as complex as an injury lawsuit. Whatever the type of liability damage that a company is facing, it is much easier to deal with this when there is a commercial liability policy to handle it.

Good commercial liability insurance will protect you from civil damages that would be devastating to your company. You cannot necessarily afford to save up enough cash to be able to handle these things. It is much better to think of this expense in terms of an easy insurance payment that will be your catch-all in the event of a civil damage. Due to the excessive tort damages promoted by many trial lawyers, it is possible to have your entire business destroyed by even the most trivial of lawsuits. This is why commercial liability insurance exists; you want to protect your business from being obliterated overnight by a mistake or frivolous lawsuit.

Civil damages can be astronomical. News outlets have reported of multi-million dollar lawsuits for things as silly as a customer spilling hot coffee. You don’t want to find yourself staring down the barrel of a lawsuit that would deliver a penalty that makes your annual profit margin cower in fear.

You have worked hard to create jobs and deliver the best quality products and services at the lowest possible price. You are out in the trenches putting people to work. Your employees deserve the stability that a company with good commercial liability insurance can provide. They will rest easily knowing that your company will not disappear overnight the first time there is an accident or a trivial lawsuit. You have services to offer and hard working employees who need this protection. Keep your business sound with a very well considered commercial liability insurance policy. Make sure it covers what you need at a price your company can afford. Don’t wait until it is too late.

Find commercial liability insurance quotes online and through your business peers’ recommendations and the professional organizations you belong to.  Be sure to get many quotes, research your coverage needs, and compare costs.  Search online, but also, if you have any questions, consult an insurance agent experienced in your field and commercial liability insurance.

Basics of Liability Insurance

Small business liability insurance covers small business owners in the event that they’re sued, protecting both business and personal assets. Insurance policies usually cover both damages of an unfavorable outcome and the legal costs associated with the lawsuit. There are four types of liability coverage, addressing the needs of specific businesses or industries.

Types of Liability Insurance Coverage

The most common coverage is general liability insurance – sometimes known as Commercial General Liability. This covers the business in the event of advertising claims, property damages, or injury claims. Some policies also include slander, libel, or infringement of intellectual property rights. Businesses that provide services may also need another type: professional liability insurance. This covers against claims of malpractice, negligence, errors and omissions. For some professions in some states, it may be required, especially in the medical and legal fields. Product liability insurance covers businesses that sell and manufacture products, protecting them in the event that a customer gets injured while using the product. The newest form of liability insurance is employment practices liability insurance. It covers lawsuits for sexual harassment, wrongful termination, or discrimination.

Types of Liability Policies

Liability insurance is either a “claims-made policy” or an “occurrence policy.” Claims-made policies are more common; they protect the business only for claims reported when the policy coverage is in force. Thus, if the policy lapses and a former employee reports a claim – even if the event occurred when the insurance policy was in effect – the insurance company is not obligated to cover any damages. In contrast, occurrence policies may cover claims reported years after the event occurred, even if the insurance coverage has since lapsed. Some claims-made policies include prior-act coverage, which covers acts that occurred during a specific timeframe. Naturally, occurrence policies have higher premiums than do claims-made policies.

Liability Coverage Amount

Liability policies always have a maximum amount they cover during the policy period. They also usually include a per-occurrence maximum. If the business is sued for $2 million and its occurrence maximum is $1 million, then the insurance would pay $1 million and the company would have to pay the extra $1 million. To cover this gap, businesses sometimes get an umbrella policy. Owners should know what type of coverage they need and read the fine print to make sure the umbrella policy appropriately covers all gaps.