Types Of Small Business Liability Insurance

By Author: Stam Bett
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There are dozens of types of business insurance policies, all of which are designed to cover almost any potential risk a business may face. Most businesses don't need every type of insurance, although most will need a few. One of the most important types of insurance is small business liability insurance, which covers not only general liabilities but product liability and professional liability, depending on your business. Here's an explanation of the different types of liability insurance your business may need.

General Business Liability Insurance
General business liability insurance is one of the most essential types of business insurance and no business should operate without it. This type of insurance covers your business in case of claims or lawsuits arising from accidents, injuries or negligence and the covered claims may include property damage, false advertisement, personal injury, bodily injury and even slander. Your policy will also cover many expenses of defending yourself, including legal representation, although punitive damages (which are awarded as a punishment) will not be covered.

Small ...
... business liability insurance also covers you against liability if you cause damage to a property you are renting, including fire damage. If you rent your building, this is absolutely essential. It will also cover misleading or false advertising and copyright infringement.

Product Liability Insurance
If you produce, sell or distribute a product, it's important to understand that you may be held liable for the safety of this product. This form of insurance covers any claims that arise from defects in products that cause harm or injury, although specific coverage depends on the type of product you sell or make. The cost of product liability insurance will depend greatly on the risk of your product, as a company that produces medication will have higher risk, and a higher premium, than one selling clothing.

Professional Liability Insurance
Unlike business general liability insurance, this specialized liability policy will cover you from errors, malpractice and negligence in the services you provide to your customers. This insurance is designed for businesses that offer professional services and it also goes by the name errors and omissions insurance. In some states, certain professions are required by law to carry professional liability insurance. When it comes to this type of business insurance, Miami, for example, requires that doctors, dentists, clinics and lawyers have a current policy at all times.

Do You Need Small Business Liability Insurance?
Unfortunately, we are living in a litigious society and liability insurance is a smart investment that won't cost much. You annual premium will be between $700 and $2,000, which breaks down to only $58 to $167 per month, depending on your business and coverage needs. Compare that to the thousands or millions you may spend if you're forced to fight a case in court.

While yu can buy general business liability insurance separately, most business owners choose to buy a complete Business Owner's Policy (BOP), which combines liability insurance and property insurance into one to save additional money.

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