Running your own business can be very rewarding. You get to be your own boss and set your own hours. You feel pride in working hard to build a business that carries your name. That’s why you buy the right business insurance.
Having proper business insurance gives you the peace of mind to focus on building your business, instead of worrying about what might happen. It gives you the confidence to reach out to new customers, and shows customers that they can trust you to be responsible and reliable.
The common risks of owning a small business
The downside to owning a small business is that you bear the risks of something going wrong. Imagine this:
- You work for a demanding customer who’s never satisfied. As well as refusing to pay the full fee, they also threaten to sue you for professional negligence.
- A client trips over your office doorstep. They break their wrist, and request that you pay for their medical expenses.
- Someone steals your vital equipment out of your van. You have to buy new equipment so that you can meet your obligations.
- One of your competitors accuses you of using a photo of their work on your Instagram feed, and sues you for damages.
What is premises liability insurance?
Premises liability insurance covers accidents that take place on your business premises. For example:
- A client comes to your office. They slip on the polished floor and hurt their knee.
- A delivery person trips over loose stones in the pathway to your office door and falls, hurting their back.
- Your office is in your house, where you live with your pet dog. One day, you forget to tie up your dog and it bites a client.
Your business premises refers to the area where you work. This could include:
- Your office, workshop, studio, or other workspaces
- The pathway leading up to your workspace
- A garden or land around your workspace
- Your office parking lot
If you rent your premises, you’re still held responsible for any accidents that happen there.
When do you need premises liability insurance?
You might not be liable every time someone gets hurt on your premises. If you’re working in a shared building, you usually won’t be held liable for accidents that happen in the common areas. This means places like the hallways and entrance area. If you’re renting your office from a landlord, it’s important to find out which areas are your responsibility, and where the landlord would be liable.
Who was involved in the accident makes a difference too. If someone breaks into your office, then trips over the hole in the carpet while stealing your computer, you generally won’t be held liable for their broken leg. But you would be liable if an invited guest – such as a client – or a licensee, such as a courier, breaks their leg. Guests are people who come to your premises on your invitation, like customers and clients. Licensees come to your premises for their own reasons but with your agreement, like to deliver a letter.
What’s the difference between premises liability vs general liability insurance?
You already have general liability insurance, so you might ask yourself ‘What is the difference between premises liability vs. general liability insurance?’
General liability insurance is a package that includes a few different types of insurance. It usually covers:
- Bodily injury to a third party during your work
- Damage to someone else’s property
- Personal injury, such as accidental copyright infringement
General liability overlaps with premises liability insurance. For example, if someone trips and falls in your office, both your general liability insurance and premises liability insurance could cover the cost of their medical fees. But a separate premises liability insurance policy has a higher amount of coverage than a general liability insurance policy.
How to choose the right premises liability coverage
Choosing the right premises liability coverage means knowing what to look for. Consider these points before you buy a policy:
- How much coverage do you need? You might want a policy that covers you up to $500,000, up to $1,000,000, or even more.
- Can you pay monthly, or do you need to pay a whole year’s worth of premiums in one go?
- Is the claims process fast and easy?
- Is the insurance company reliable? You want a company that has a high rating from a ratings firm like A.M. Best.
Premises liability insurance is another way of making sure that you can sleep easy while you expand your small business. Preserve your peace of mind with Next Insurance.