How Much Business Liability Insurance do I Need?
It can be a challenge to determine just how much business liability insurance your company needs. Obviously, you want to spend as little as possible for as much coverage as you can get. However, you know that business liability insurance protects you and your business. Your business is obviously a major investment in your life.
When you consider all the time, effort and money you have put into building your business up you know how wise it is to get the most insurance coverage you possibly can. You do not want an unfortunate accident which results in someone getting seriously hurt at your company’s premises to bring down all that you have worked for. On the other hand, you do not want to be paying out so much for insurance that you feel as if you are short-changing your company in the operating expense department.
What are Your Risks?
The best way to figure how much liability insurance you need is simply to start with asking yourself how much risk your business undertakes each day in its ordinary operations. For example, if your company manufactures cosmetics you probably do not have to worry about employees getting hurt on the job as much as perhaps a window-washing business does. Yet, when you consider the end user of your product in an example like that, the window washing company has less to be concerned with.
Unless in the case above the window-washing customer is upset about the quality of the job, there may not be much more that company needs to be concerned with as far as insurance coverage goes. In the instance of the cosmetic manufacturer, if something in the cosmetic irritates an end users skin and does some damage resulting in claims of negligence, then
that company needs specific kinds of liability coverage for the product as well as sufficient amounts of coverage for any injuries that may occur to employees on the job.
The best way to ensure that the amount of liability coverage you are seeking is adequate is to speak with your insurance broker directly. Or, ask a few different brokers who specialize in liability coverage for your field what the best amount, or limit, is. You can generally gauge the amount by the amount of risk involved in your company’s daily operations. The greater the risk involved in your work, the more liability coverage your company will want to have.
How to Calculate Your Coverage
When you have a basic idea of what your company’s greatest risks are, you are armed with a basic amount of information that will allow you to seek the best liability coverage for your company based upon that risk. You may even want to speak with owners of other businesses like yours about what they recommend based upon their experience. Every business is different of course, but you can count on restaurant owners and cab services, especially local ones, carrying the same types if not similar amounts of insurance.
Remember, too, that the basic amounts of coverage will be dictated by local regulations. Again, you will want to consult with your broker. This is especially true if you are new to business ownership. You can find out just what the required insurance limits are for your type of company.
Keep in mind, you do not want to do this research once and forget about it. Your insurance needs will change as your company grows and expands. Finding out how much business liability insurance your company needs will be an ongoing project for you as your company continues to succeed.