Business liability insurance is an essential investment to protect against potential lawsuits and claims made against the business. Liability claims can cost millions of dollars and bankrupt a company. For example, a report from the Insurance Information Institute revealed that in trial verdicts in 2020, the average settlement was $7 million for product liability injury claims, which is more than double the average $3 million award for claims of general business negligence.
Business liability insurance is the first line of defense for a company & its financial stability and success. It protects the business from potential claims and lawsuits when it is responsible for harming others or their property and is subject to possible significant claims and legal action.
Reasons for Business Liability Insurance
Business liability insurance provides financial protection against potential legal claims and lawsuits and is critical to a comprehensive risk management strategy.
Here are five reasons for business owners to invest in liability insurance:
Lawsuit Protection
Lawsuit protection is critical because businesses are vulnerable to runaway lawsuits, and business liability insurance protects against losses due to claims charged against the company. In addition, it pays for legal costs and settlements against the business when it is found at fault for losses due to bodily and personal injury, property damage, and similar claims.
Compliance
General Liability insurance is often a requirement. So, you’ll find government and most private contractors and lenders require General Liability insurance with minimum coverage as a condition of conducting business with them.
All-Around Assurance
Running a business is often stressful because, to avoid disaster, its owners must deal with many factors outside their control that can negatively impact it. And a business liability insurance policy helps business owners worry less about catastrophic casualties while showing employees and vendors the company takes protection against potential financial losses seriously.Think of insurance as loss protection and assurance of peace of mind – and with good insurance, you get both.
Reputation
By adequately insuring their businesses, business insurance owners communicate to their clients and business partners that they are responsible and trustworthy. A reliable business insurance program generates the respect of new and existing clientele. Your customers will value your quality and care in providing coverage that protects their interests and yours.
Unexpected Events
Liability insurance pays for damage to other people’s property or injuries that happen by accident or chance. Insurance comes from the idea that there is a shared risk by spreading the cost of possible losses across a large group. This way, a single business doesn’t have to suffer a wipeout from paying the full cost of an otherwise disastrous, unforeseen event.
How Much Does Business Liability Insurance Cost?
The cost of business liability insurance varies widely depending on factors like these:
Business size and location
Business classification
Coverage amount
Types and levels of risk associated with the business
Creditworthiness
Claims history
A typical business liability insurance premium depends on a mix of the above and other factors. The annual premium for General Liability ranges from a few hundred dollars per year for a low-risk business to several thousand dollars or more for more extensive, higher-risk companies. Bundling coverages like Property, Workers’ Compensation and liability insurance can be a fantastic way to lower your premium. Besides General Liability, what other liability coverages do businesses need? General Liability protects against personal injury, property damage, advertising injury, and reputational harm. However, complete protection will require other liability coverages such as those below:
Securance recommends these business liability insurance coverages, among others, where applicable.
Professional Liability / Management Liability (also known as errors and omissions) insurance covers claims arising from mistakes or oversights when rendering professional services such as consulting, accounting, or legal assistance.
Product Liability insurance protects against losses due to defects, malfunctions, or other problems when a company manufactures, sells, or distributes products that harm its customers.
Cyber Liability insurance covers claims related to data breaches, cyber-attacks, ransomware, and other digital security incidents.
Employment Practices Liability Insurance (EPLI) safeguards businesses against claims related to employment-related issues, such as discrimination, harassment, and wrongful termination.
Directors’ and Officers’ Liability insurance protects the directors and officers of a business against claims related to their management decisions and actions.
The Securance Solution
For five decades, the top priority of Securance’s leadership is exceeding client expectations with best-in-class service. It is an honor to be entrusted with our customers’ business liability insurance and risk management programs in Houston, in all of Texas, and beyond. Securance uses its independent agency status to negotiate coverage terms and pricing through its network of leading insurance carriers. We seek to deliver excellent service, comprehensive coverage, and competitive pricing, and it would be a pleasure to serve your company’s needs. We welcome a chat to see how we fit your plans to protect your business.
You will always have a person to talk to at Securance.
Give us a call at 713-977-6606.
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