General and professional liability insurance

 

General liability insurance protects your business from financial loss due to legal issues like lawsuits, injury claims, property damage, and legal costs. It covers claims from clients, customers, or the general public that might arise from your business operations or premises.

As a business owner, you have a lot of responsibilities. Liability insurance helps ensure you're covered if someone slips and falls at your office, or claims your product caused them harm. It protects against scenarios like a customer tripping in your store, a client getting sick from a meal at your restaurant, or a visitor injuring themselves at your rental property.

The details of a general liability policy can vary but typically cover legal expenses, medical bills, repair costs, and settlement amounts up to your policy limits.

It's a good idea for any business to have general liability insurance. The peace of mind it provides is invaluable. Talk to an insurance agent to determine how much coverage is right for your business based on factors like:

• Business type (retail, restaurant, consulting, etc.)

• Location(s)

• Number of employees and clients

• Value of your premises and assets

• Your risk tolerance

When to Consider Professional Liability Insurance

As a freelancer or small business owner, professional liability insurance, also known as errors and omissions (E&O) insurance, is something you should consider.

This type of insurance covers you in the event a client claims you made a mistake or did shoddy work. Rather than going out of pocket for legal fees and settlements, E&O insurance protects you financially.

READ ALSO: Clever Ways to Get the Best Deal on Workers' Comp

You should think about professional liability insurance if:

• You provide advice or consulting services. Whether you're a marketing consultant, web designer, or accountant, if you provide professional advice or consulting services, E&O insurance will guard you against claims of poor counsel.

• You have a service-based business. For freelancers and small businesses in fields like IT, healthcare, legal, and finance, there is more opportunity for clients to allege mistakes were made. E&O insurance gives you peace of mind.

• Your work directly impacts a client's business or operations. If your services are essential to how a client functions or generates revenue, the stakes are higher if something goes wrong.

• You have a professional license or certification. For occupations that require specific credentials like architects, engineers, therapists or real estate agents, licensing boards often mandate a minimum amount of E&O coverage.

• Your business is growing quickly. Fast growth can lead to more clients, larger projects, and new types of work. This expansion also brings a higher chance of errors or oversights.

Protecting your business from the unforeseen is worth the investment. Consider professional liability insurance for peace of mind and financial security. An ounce of prevention is worth a pound of cure, as the old adage says.

READ ALSO: Lapointe Insurance: Protecting What Matters Most

Frequently Asked Questions About General and Professional Liability Insurance

Here are some common questions about these types of business insurance coverage:

1. What does general liability insurance cover?

General liability insurance covers claims like slips and falls on your business property, damage to a client's property while on the job, or injuries caused by a product you manufacture or sell.

It protects against the cost of litigation and any settlements or judgments.

2. Do I need professional liability insurance?

If your business provides professional services like consulting, accounting, healthcare, legal services or technology services, professional liability insurance is a must.

3. How much coverage do I need?

The amount of coverage you need depends on the nature of your business and the risks involved. You'll want enough to cover potential claims and legal fees.

4. What does a liability policy cost?

Premiums for liability insurance vary based on factors like your industry, revenues, number of employees, and claims history. According to the Insurance Information Institute, average liability premiums for small businesses in the U.S. are between $600 to $3,000 per year. Professional liability premiums tend to be on the higher end of that range.

5. Are there ways to lower my premiums?

There are several ways you may be able to reduce your liability insurance costs: raise your deductibles, reduce coverage limits, bundle multiple policies together, improve risk management practices, maintain a good claims history, and shop policies from different insurers. You can also ask about discounts for things like having a formal safety plan in place.