After many years of careful planning, you are finally ready to launch your small business. Believing that introducing your business via a launch will be a good start for the company. What’s a business name if without a proper introduction?
One of the invited friends in a most nonchalant manner asked you about your small business insurance. And that single question hit you. You have no insurance for the business yet and you are just about ready to start your operations. So you hurriedly start flipping through the phonebook pages to find an insurance broker to help you with the insurance requirements of your business.
A meeting with the insurance broker was arranged to discuss what type of insurance coverage your business would need. Just like you would protect your home or car with insurance, any small business also needs protection from legal liability, natural disaster or any other risk the business may face during the course of its operations.
Your insurance broker advised you to take on general liability insurance coverage for your business as this can cover claims on bodily injury, property damage, personal injury or other claims resulting from an accident or negligence on the part of the business. This also offer coverage for legal costs incurred when the company or business is sued by 3rd parties. To sum it up, general liability insurance will offer protection for the company or business from accidents that could result to financially draining lawsuits and claims, eventually causing the business to go bankrupt.
Consider the following to determine the insurance coverage limit or the amount needed to insure the business.
Type of business and the level of risk for such business
Size of the business in terms of employees, target customer, etc.
Business net worth
Most businesses would set a coverage limit which is not below the one million dollar mark, as this figure is usually more than enough to cover the usual claims. A factor that will significantly affect this figure is if the state where your business operates usually awards high punitive damages. The million dollar coverage limit may have to be increased in this case.
There are other factors which can also affect the cost of liability insurance coverage for your small business.
Small Business Insurance | Liability Insurance Limits
This refers to the maximum amount the insurance company will cover on a claim. Your insurance broker will be able to calculate the limit your business needs based on the business’ specific risks to make sure that the set limit will be enough to cover the highest possible amount.
Small Business Insurance | Deductible
This is the amount the business has to pay before the insurance will cover the rest of the claim amount.
Small Business Insurance | Exclusions
There are instances, cases or things which the insurance does not cover. Acts of war, intentional injury or accident are some examples of the common exclusions to a business general liability insurance coverage.
Get two or more quotes from different insurance brokers for a comparison on rates. With this comparative data you can negotiate a better deal with any insurance broker.
And with your small business insurance issues taken care of, you are more than ready to offer a champagne toast when you launch your business.
About the Author: My name is Mary G. Watson. I am a freelance writer for www.liabilityinsurance.org. I am 33 years old and I have 2 sons. I used to work at a car company in New York as a car insurance agent. I usually write about insurance. However, my topics are not only about cars but also about business and other topics as well.