Determining the Cost of Small Business Liability Insurance
General liability insurance helps cover claims resulting from property damage, bodily injury, or personal and advertising injury. This same coverage is also provided by a small business liability insurance policy.
As you review your coverages, remember that small business liability insurance is also known as general liability insurance and commercial liability insurance. Despite which name is used; this coverage can be added to your small business insurance policy.
Keep in mind that small business general liability insurance provides the same coverages as general liability insurance. However, determining the cost of your small business insurance will depend on:
- Your location. Rates vary by state, where you conduct business, and how populated your area is. Being located within an area that has increased claims will also affect your rate.
- The number of employees you have. Sole proprietors and businesses with employees pay different prices for their insurance coverage.
- Exposure. Every business operates with a different level of risk. For instance, small businesses that manufacture items or install equipment have a higher risk than those that only deliver equipment.
Expanding Your Small Business Insurance Liability Coverage
As you review your small business liability insurance coverage, you may want to also consider:
General liability insurance. This helps cover bodily injury and property damage claims made against your small business. For example, say a customer gets injured while using a shopping cart in your store. Your general liability insurance can help cover the costs associated.
In another example, say you’re helping get a heavy object down from a shelf for a customer. You accidently drop the item and it lands on the customer’s foot. Your general liability insurance can help cover the medical costs associated.
Professional liability insurance. This is often called errors and omissions insurance. It helps cover claims resulting from errors or omissions in professional services or products you provide. For instance, say you own a consulting company. After providing financial advice to a client, they make a claim against you for negligence. It turns out your advice was not ideal for their financial situation. Your professional liability insurance can help cover the costs associated.
In another example, say you provide advice to a client that damages their computer system. The program you suggested turned out be incompatible. Your professional liability insurance can help cover the costs associated with the damage.
Commercial umbrella insurance. This is an extension of your small business liability coverage. It helps cover costs that exceed your primary coverage. For instance, say a customer gets severely injured at your place of business. Your commercial umbrella insurance can help cover the medical costs that exceed your primary insurance policies.
In another example, say you accidently commit copyright infringement in your new advertising campaign. Commercial umbrella insurance can help cover the costs of any lawsuits that result and exceed your primary policies.
The more your business expands, the more likely it is that you will need to increase your coverage. Coverages to consider as you grow are:
Workers' compensation insurance. This coverage helps provide benefits to injured employees. This can include medical care, wages lost from work time, and more. For example, say an employee hurts their back while lifting heavy boxes on the job. As a result they require an emergency room visit and weeks of physical therapy. Workers compensation insurance can help provide your employee with wages from lost work time.
In another example, say you own a construction company. While working on the job, an employee accidently breaks their leg. Workers compensation insurance can help provide your employee with wages from lost work time.
Commercial auto insurance. This coverage helps cover costs from auto accidents. Keep in mind that coverage is only provided if you or an employee are found at fault. For example, say your employee gets into a car accident while driving to see a client. Commercial auto insurance can help cover the costs associated with the accident.
In another example, say an employee driving your company’s van, backs into a customer’s car while leaving your business. Commercial auto insurance can help cover the costs of the damages to the customer’s car.
The Hartford has been helping small businesses pin down the insurance they need for more than 200 years. We’ve also employed specialists dedicated to helping small businesses find the perfect insurance for their needs for the last 30 years.
Does My Policy Already Have Small Business Liability Coverage?
A typical business owner's policy (BOP) includes:
Commercial property insurance. This coverage helps protect your business’s property. This can include buildings, equipment, inventory, furniture, and fixtures. For example, say a fire destroys valuable equipment at your business. Commercial property insurance can help cover the costs of replacing that equipment.
In another example, say a thief breaks into your business and steals valuable computer equipment. Your commercial property insurance can help cover the costs of replacing it.
General liability insurance. This coverage helps cover lawsuits resulting from bodily injury or property damage. For example, say a customer drops merchandise and breaks their toe while shopping in your store. General liability insurance can help cover the medical expenses associated.
In another example, say you own a hardware store. While handling sharp objects, your customer accidently gets a deep cut on their hand. Your general liability insurance can help cover the medical costs associated.
Business income insurance. In the event of a covered loss, this coverage can help replace income needed to pay financial obligations. For example, say a fire destroys part of your building. As a result, you are not able to open your business. Business income insurance can help cover your costs until your business can generate revenue again.
In another example, say a thief breaks into your jewelry shop and steals your merchandise. Business income insurance can help cover your costs until your business can generate revenue again and replace the stolen items.
After consulting your policy, reach out to The Hartford to ensure that you have the right type of small business liability insurance. Insurance can vary state-to-state. This means that speaking with a representative is especially important.