If you're an entrepreneur with your own business, you may be wondering about insurance. It can be hard to understand all the different types and figure out what you need, which is why we've put together this guide to try to help.
Why Do I Need Small Business Liability Insurance?
In a nutshell, liability insurance of different types serves as a type of protection for your business so that rather than focusing on what could happen, you can focus on helping your business grow and thrive. There are many different types of insurance policies for small businesses, but we would suggest that general liability insurance, which we will discuss further, is the most important. General liability insurance refers to a policy for if someone is injured or has their property damaged in a way that's related to your business. Although liability insurance isn’t legally required in some places, it’s a sensible choice for every small business. There are some other types of small business insurance that also make sense, so let's look into them, together.What Types of Liability Insurance Exist for Small Businesses?
The term ‘liability insurance’ can refer to a lot of different types of liability insurance policies, and their names and meanings aren't always easy to understand. You don’t necessarily need to buy every type of small business insurance, but there are several to consider seriously. Here’s an overview of the different types of liability coverage:General and Public Liability Insurance
General liability and public liability are often referred to as are the same thing, but they are two different forms of liability insurance. Public liability insurance (PLI) pays out if someone breaks their wrist tripping over the loose carpet in your office or if you accidentally break a lawn ornament when cutting the grass. General liability insurance (GLI) is a package that includes public liability insurance and product liability insurance. It’s a great way to get the most important types of business insurance policies. If you can only afford one type of business insurance, this is the one to get. For most business owners, GLI is the ideal type of insurance because it covers you for types of situations resembling:- Fixing damage done to property belonging to someone who is not you or your employee during your work
- Medical costs for injuries to a third party on your premises or through your work
- If a third-party sues you for sharing before and after photos of a site you worked on or a client you helped
- Damage caused by a product that you make or sell
Commercial Liability
Commercial liability insurance can be another way of referring to general liability insurance. Sometimes, though, it means these three types of insurance coverage for businesses:-
- Property insurance, which covers damage to your office premises or equipment
- Workers’ compensation, which pays for your employees’ medical costs if they are injured at work
- Public liability insurance