In short, you need small business liability insurance as soon as possible. But let's not be alarmist. You don't want to rush into getting insurance just because it's “fast” and “cheap.” That's a recipe for getting coverage that won't protect your company.
So how do you find adequate small business insurance at a low price? First, you need to understand the answers to the following questions:
- Why do I need liability insurance for my small business?
- When do contracts require small business insurance?
- How can I find affordable liability insurance for my small business?
After answering these questions, we'll go over how you can save 10 to 20 percent on your small business coverage by working with our industry specialist agents.
Why Do I Need Liability Insurance for My Small Business?
Every day, your business is exposed to risks: customers walk through your doors, you sign agreements with clients, you operate in an office owned by someone else, you visit a client at their place of work, etc.
In each of these scenarios, something could wrong. A customer could fall down your stairs and be injured on your property. You could break equipment at a client's office. You could be sued and have to pay tens (if not hundreds) of thousands of dollars in damages.
To cover these risks, there are multiple types of liability insurance for small businesses:
- General Liability Insurance covers third-party (non-employee) lawsuits over property damage, bodily injuries (e.g., slip-and-fall accidents), and advertising injuries (e.g., copyright infringements).
- Errors and Omissions Insurance (aka Professional Liability Insurance) pays for lawsuits over the work you do.
- Workers’ Compensation Insurance (with Employer's Liability Insurance) helps pay for employee medical expenses when they're hurt on the job. It also covers lawsuits over workplace illnesses, injuries, and accidents.
To learn more about the different kinds of small business insurance, read the article, "What Do Other Businesses Buy?"
When Do Contracts Require Small Business Insurance?
When you sign a contract, you might have to provide proof of insurance (aka a Certificate of Liability Insurance). For example, you might need small business insurance in order to sign...
- Customer contracts.
- Vendor agreements.
Before they work with you, business partners and landlords often want to know that an insurance company is standing behind your business and can pay for lawsuits or other expenses if something goes wrong.
How Can I Find Affordable Liability Insurance for My Small Business?
Be careful when looking for "cheap" liability insurance – when it comes to coverage, you truly get what you pay for. Instead of focusing on the price of the policy, the deciding factor should be how much coverage you're getting. That said, read our guide, "How Much Does Small Business Insurance Cost" to get a feel for the policies out there and what you might expect to pay.
Also, here are some ways to ensure you don't overpay for your insurance:
- Work with independent brokers who can get insurance quotes from multiple companies. This means various carriers compete to offer you better deals. You'll have more policies to choose from and better leverage.
- Bundle policies together. When you buy a Business Owner's Policy, your provider bundles General Liability and Property Insurance into one package at a reduced rate.
- Invest in quality insurance and don't start and stop coverage. Businesses that cancel their policies or have gaps in their coverage history are charged higher premiums in the long run.
- Work with small business insurance experts. Insurance brokers that specialize in small business coverage help you find protection that fits the size of your business. Even the smallest businesses running out of the owner's home can find coverage that is tailored to the size of their operation.
How Can I Save 10 to 20% on My Small Business Liability Insurance?
At insureon, we provide industry-specific insurance for small businesses and know how to find coverage at an affordable price. On average, insureon customers save between 10 and 20 percent on their premiums. To find out how much you could save, submit an online insurance application.