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Small Business Liability Insurance

Updated 02:22 PM EST, Wed August 7, 2019

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What Does Liability Insurance for Small Businesses Cover?

Liability insurance for small businesses helps cover the costs you may incur from claims of bodily injury and property damage to others that are made against your business. This type of insurance typically covers costs related to claims of property damage and bodily injury that may be caused by products, damage due to operations, personal injury, libel, slander, and advertising errors.
Each small business is different and faces unique risks. Fortunately, there is a broad range of small business liability coverages available to address both the broader risks most businesses face as well as the more specialized risks different small businesses must prepare for. For basic coverage, consider getting General Liability, Business Auto, and if you have employees, you’ll probably need Workers’ Compensation Insurance.  For added protection, smart business owners often extend their coverage by adding Commercial Umbrella insurance.

Understanding Small Business Liability Insurance

To prepare for the typical risks businesses must protect against, let’s review the standard business liability insurance coverages most businesses need.
  • General Liability Insurance helps cover the costs to your business if someone claims they were injured on your business property. It also helps cover claims that your business damaged someone else’s property, that damages were incurred due to a mistake in your advertising, as well as claims of libel, slander and more.
  • Business Auto Insurance helps cover the cost if you or one of your employees damages someone else’s property while driving for work purposes, this insurance helps cover the costs. Coverage can include someone else’s car, business location, or personal property such as a mailbox or fence.
  • Professional Liability, also called Errors and Omissions, helps cover the costs of claims made against your business for damages caused by errors or omissions in the professional services or products you provide.
  • Workers’ Compensation Insurance provides benefits to employees who are injured at, or become sick from, work. In the event of a worker’s death, it can also provide benefits to a worker’s family.
  • Commercial Umbrella extends your small business liability coverage. If the costs of a claim exceed your primary coverage, Commercial Umbrella helps cover the excess costs of the claim.
Because you want to protect your assets from any number of liability risks, it’s important that your small business insurance provides a broad range of coverage. To cover the most common liability risks, at a minimum, most businesses choose all of these primary coverages.
For example, if a customer slips and falls, General Liability Insurance can help cover the costs of the accident. If an employee slips and falls, Workers’ Compensation Insurance can help cover the costs of the accident. And if you are an accountant and your client claims you made an error that cost them a lot of money, Professional Liability can help pay the costs to resolve the claim.
The type of insurance your small business must carry also depends on the state you do business in. Most states require businesses to have Workers’ Compensation Insurance and Commercial Auto coverage. And each state’s coverage requirements for Worker’s Compensation and Auto insurance may differ.

Why Do You Need Liability Insurance for Small Businesses?

Without liability insurance, the costs of a claim made against your small business could come out of your own pocket. Also, most states have minimum coverage requirements for some types of liability insurance, like Commercial Auto. If your business does not meet those minimum coverage requirements, your business could be sued, fined or even forced to shut down.
To learn more about how different liability insurance coverages can help protect your business, talk to an insurance professional. The following questions may be helpful to ask.
  • Which of my employees require Workers Compensation Insurance coverage to operate in this state?
  • Do my liability insurance coverages protect me in other states?
  • Do I need General Liability insurance for the part of my business that I run out of my home?
  • What are the minimum limits of liability insurance that I need?
  • Can I increase or decrease my liability insurance premiums throughout the year?
To learn about liability insurance for your small business, get a quote today.

Extend Your Small Business Liability Insurance Coverage

Umbrella Insurance, also known as Excess Liability Insurance is a great way to extend your business’s liability coverage. Umbrella Insurance acts as a safety net when you reach the limits of your primary business liability coverage.
Here’s an example. A customer slips and falls in your store. They are injured and make a claim against your business for $300,000 to cover their medical costs. If your General Liability policy, which covers slip and fall accidents on business premises, has a limit of $200,000 and you don’t have additional coverage, you might have to pay the difference out of your own pocket. This could cost you $100,000 of your personal finances. If you have a Commercial Umbrella policy, which typically comes with coverage limit increments of $1 million, $2 million and more, it could help cover the excess liability cost.
Commercial Umbrella Insurance is designed to cover the excess liability costs when the costs of a claim exceed the limits of your General Liability policy. The cost of an Umbrella policy is relatively modest compared to the coverage you receive. Typically a $1 million to $2 million Umbrella policy can be purchased for just hundreds of dollars – maybe $250 to $500. For a relatively low cost, your business can get millions of dollars of extra liability coverage. And you can enjoy peace of mind knowing you are prepared in the event of a major liability claim.

Types of Small Business Insurance

Liability insurance doesn’t cover the cost of accidents that happen to your own property. Whether it be a flood, fire or theft, you are still responsible for protecting your small business. Even something like lost income can be covered by insurance. To help protect your business from costs beyond liability claims, consider adding the following small business coverages from The Hartford.

Why The Hartford for Small Business Liability Insurance?

Over 1 million small business owners trust The Hartford for their insurance needs. The Hartford has been protecting customers for more than 200 years. We’re dedicated to helping small businesses prevail. That’s why we created a team of specialists dedicated to serving small businesses over 30 years ago.
Our claims representatives consistently earn the industry’s highest customer claims ratings and reviews. The Hartford has been recognized as a World’s Most Ethical Company® 11 times by The Ethisphere Institute.1 Find out how we can help you protect your small business, get a quote today.

Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, One Hartford Plaza, Hartford, CT 06155.
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including issuing company, Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.