If you are a business, yes, you do. If not, you still may need it.
Liability insurance provides protection from a list of expenses that result from liability claims, such as bodily injury or property damage, medical expenses, and defense costs of lawsuits. The cost of insurance depends on whether the insurer considers you or your business high- or low-risk for claims, and if you’ve had claims for injuries or damages in the past. It’s best to talk to your insurance agent or broker for advice on what the perfect solution for you is.
Types of Liability Insurance
Here are three kinds of liability insurance that you need to know about.
- General liability insurance provides protection against legal situations associated with accidents, injuries and negligence claims.
- Product liability insurance protects your business against financial loss for defective retail products you manufacture, wholesale or distribute. You can see how a big retail company would need this coverage. But it is in your best interest to have some coverage if your home-based business makes candles or bath and beauty products that might, for example, cause allergic reactions in some individuals.
- Professional liability insurance covers service providers against malpractice (i.e., doctors, dentists), errors and omissions (i.e., architects, engineers), and negligence (i.e., missing deadlines, not finishing a project on time) when providing those services to your customers. Let’s say that you design websites and you miss the “go live” date for your client causing the client to miss an important sale kickoff. You could be liable for the missed sales income of the client.
How Do I Get Liability Insurance?
- Assess what your risks are. If your business is hit with a lawsuit, even if you consider the claim outrageous, you will still have to devote time and money to handle it.
- Shop around for coverage. Different companies, agents and brokers offer different coverage. There is sure to be one to cover your specific needs.
- Bundle with other coverages from the same insurer to realize savings, like the insurer that handles your home or auto insurance. But keep in mind your business may have unique risks that this insurer cannot adequately cover. They probably won’t warn you about what they can’t cover, so it’s best to talk to two or three providers.
- Use a reputable licensed agent or broker. An agent represents only one insurance company; a broker is not captive to one insurer, but represents several insurers. They work on commission, so be sure they understand your risks and needs. If you need assistance finding a licensed agent or broker, you can contact your state’s insurance department.
- Do an annual assessment of your business and your coverage to discover any changes that may need to be made.
Coverages You May Not Know About
- Wedding and Event Insurance – Do you know if you need insurance for your big day? Hopefully, the venue has insurance to cover major problems. But you may want to buy one day event insurance so you’re not spending your honeymoon worrying about whether an injured guest and their insurance carrier will include you in a lawsuit.
- Vendor Liability Insurance – Usually the body hosting an event has coverage, but most don’t cover all its vendors. There are situations where you are on your own as an exhibitor. Consider injuries arising from products you sell, or associated with your own specific booth. You also are responsible for protecting your own cart/booth from losses due to vandalism, theft, or fire.
- Sports Liability and Accident Coverage – This policy would cover players, coaches and fans for leagues, clubs, and teams of almost any sport. Events such as clinics, tournaments, and camps are protected too.
- Martial Arts Insurance – Coverage is for the special needs of martial arts schools for youth and adults. It combines an accident medical policy with a general liability policy. They cover an injured participant, and the owners, instructors, directors and employees in the event of a lawsuit.
- Live Action Role Playing Policies – LARP insurance offers comprehensive coverage for individuals or organizations that put on Live Action Role Playing games or productions.