By Catherine Powell
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| Image courtesy of Picserver |
When business owners ask me how much
liability insurance they need to carry, I answer their question with several of
my own. That’s because there are several
different insurance products lumped under the liability insurance banner. Depending on the type of business you own,
you could require more than one type of liability insurance.
What
kind of products do you sell?
If your business distributes and/or
manufactures products, you could very well be in line for product liability
insurance. This form of liability insurance protects a business against
lawsuits stemming from injury or damage caused by products. More importantly, product liability insurance
not only covers a business from injuries to a customer, but even a third party
or innocent bystander.
Litigation being what it is in this
country, once the lawsuits start flying, it isn’t at all unlikely that anyone
who is connected to the product could come under fire. This means you don’t have to be the
manufacturer of the product to be sued.
You could simply be the distributor that sold the product to the person
claiming to be injured by the product.
That being said, this doesn’t give a
plaintiff Carte Blanche when it comes to filing a suit. While a plaintiff can claim they were injured
while using a product, they can’t do so if they weren’t using the product as
intended. That means if someone bought a
saw from you and injured themselves while trimming their fingernails, you can’t
be held responsible. You also can’t be
blamed if the person who bought the saw modified it substantially after it left
the seller’s hands.
As far as the premiums for product
liability insurance, the more potentially hazardous the product, the higher the
rate. To give you a quote, your
insurance agent will need to assign your business a class code to properly rate
it. Product liability premiums are calculated
by multiplying your annual sales by the rate, then dividing by one
thousand. If you have yet to sell any
products, the premium is calculated on your estimated sales, then adjusted at
the end of the year based on your actual sales.
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| Image courtesy of Pexels |
An
umbrella policy isn’t designed to keep the rain out. – It’s designed
to protect your business from losses due to accidents, injuries and/or
negligence. As such is comes equipped
with several components:
1. General Liability
Insurance provides coverage to your business from bodily injury claims, damage
to others, as well as protection against lawsuits from customers and employees.
This include suits brought against the
business for slander, libel, false advertising and sexual harassment. Additionally, it covers you for medical
expenses should someone sustain an injury at your place of business. Just as with product liability insurance, the
cost of providing your business with a GL policy varies depending on your
industry. That means high risk
businesses pay higher premiums than do low risk businesses. Other factors such
as the size of the business and its location also play into the rate
calculation. If you or your employees
meet with clients face-to-face, if you or they work for others, or if you
advertise your business, you need to consider a GL policy.
2. Commercial Property
Insurance covers your premises and office equipment from damage due to fire,
theft, vandalism or water damage caused by either storms or burst pipes. Damage caused by flooding or earthquakes are
not included, unless purchases separately.
When it comes to what a CP policy will cover, the list includes office
automation, office equipment, furniture, inventory, exterior fixtures, fences
and signage. When it comes to
determining the premium, a number of factors need to be considered. These
include your business location, the type and age of the structure, average
occupancy, as well as how far your business is from the closest fire hydrant
and fire station. Buildings constructed
of combustible material such as wood have a higher fire rating than those made
of concrete and steel. Older buildings
that have never had their electrical systems upgraded have a higher fire risk
than newer construction or buildings that have been kept up to code. A CP policy can also cover your business for
revenue lost due to property damage or loss.
This way if you and your employees are forced to vacate the building
while the damage is repaired, you won’t have to dig into your pocket to cover
employee wages.
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| Image courtesy of Max Pixel |
3. Speaking of
employees, worker’s Comp covers your employees if they are injured on the job.
Are
you an expert in your field? – If you are a business professional who
gets paid for their advice, you need to ask about obtaining a professional
liability policy. This way if a client decides to take you to court because
they don’t like the job you did for them or the advice you gave them, you won’t
have to shell out all the expenses for court costs and legal representation. If you would like to get a free instant competitive liability quote click here.
Catherine Powell is the owner of A Plus
All Florida, Insurance in Orange Park, Florida.
To find out more ways to save on liability insurance, check out her website at http://liabilityinsuranceorangeparkfl.com/
Who knew there were so many different kinds of biz liability insurance.
ReplyDeleteIf you have a business, it can be sued - it's liable!
ReplyDelete