Running a business comes with many risks. These risks can potentially harm your financial security as well as your reputation. While taking precautions helps in smoothly operating businesses, there are a lot of things that could be out of your control. Thus, regardless of how you plan for everything, the possibilities for any damage cannot be eliminated and need to be mitigated with liability insurance.
Looking at the best business insurance policies must be on top of your priority, especially if you are a small business owner. But before you decide which one to choose, it is important to know the difference between the two main types of liability insurance coverage: general liability and professional liability. In this way, you can also determine which of the two suits best with the nature of your business.
General liability insurance policy helps cover costs of legal defense for claims involving personal injury, property damage, or bodily injury that happens within your business premises. This also includes harm or injury experienced by a client by using your products.
On the other hand, professional liability insurance—also known as Errors & Omissions insurance—serves as protection when your clients claim financial damages from the service that you have rendered. If your clients have suffered financial losses due to your mistake, negligence, or omissions, they can file a lawsuit against your business. Paying for the legal costs could greatly impact your financial stability. However, having professional liability coverage can help you deal with all those defense costs and expenses.
In addition, it is essential to know that general liability insurance is a claims-made policy. This means that you are protected when the claim is filed for as long as you already bought the insurance. Take note that this is irrespective of the date when the alleged event has happened. Meanwhile, professional liability is claims-made as well but you cannot get protection from claims that happened before the retroactive date.
Since both policies differ from each other, it would be more practical and wise to get them both. You can either purchase them separately or in a bundle. Besides, many employers are now requiring both of the insurance products as part of your contract or agreement. More than that, it builds trust and confidence between you and your clients if they know that you have extra added protection.
General liability and professional indemnity are two different business insurance policies. The first one is intended for damages within the company premises such as physical injury, property damage, and other product liabilities. In contrast, professional indemnity is mainly focused on businesses that provide professional service which had made a mistake during work.
With all the companies offering professional liability insurance, it could be daunting and overwhelming when choosing the right one. So, we've listed down five factors that you should focus on when picking the most reliable and reputable company.
Make sure that you are transacting with a trusted company that has been getting positive feedback from its clients. Research on how long they have been in the industry and how well they have performed in the past years. Take a look as well at their financial strength, policies that they sell, and achievements they have gained so far.
For sure, you have already encountered so many agents representing their respective companies. While they all make offers that are hard to resist, not all are going to discuss the liability coverage in detail once you asked them. At times, you would notice that they are too focused on their sales pitch and would not be able to assess your financial needs first. If you're making a decision, look for a company that discloses and explains everything that you need to know.
Since we're talking about costs and expenses, it is vital to know the financial standing of a company. This would tell if they are capable of paying out claims. Try to check reliable sites where you can find the financial rating given to a certain company to evaluate if they are financially healthy or not.
A customer that pays hard-earned money for a product would for sure rate the company honestly. Therefore, once you check the website of the company, pay close attention to what its customers have to say about their experience. Aside from reviews found on the company website, read published reports or surveys online that show how satisfied the clients are.
See to it that a company handle claims the best way possible. Being an insurer, a company's liability claim handling processes would tell so much about how trustworthy and competent they are. Hence, carefully select a company that has shown efficiency and optimum speed in paying valid claims before making your final decision. Best claims handling practices are indicators that an insurer will give you a competitive edge and financial security.
In choosing the perfect insurer, consider first the type or nature of your business. From there, look for companies that specialize in industries where your business belongs. This would help you end up with the one that has the expertise and solid background in providing insurance. After all, insurers have their strength and that's what you need to know. If you are providing services, then you must find a company that specializes in that specific area.
Some companies provide insurance coverage that comes with exclusions or limits on the amount to cover. As you look for the most suitable policy for your business, read terms and conditions thoroughly to understand what is the extent of your coverage. Don't sign any agreement without confirming vital information with the insurer. And as much as possible, ask all the questions that you have and raise clarifications regarding what you read in the terms and conditions.
Your small business should expect to pay between $1,000 and $3,000 per million dollars of coverage annually. The smaller your company is, the lower your insurance costs are going to be.
General liability is a must for any business. This comprehensive policy protects against common incidents, including bodily injuries and property damage.
The main risk of operating a business without any cover is that you may not have the funds to replace or repair damaged property, pay compensation for injured people and employees, or continue generating revenue.
The legal and financial risks that sole proprietors face are substantially the same as those faced by corporations. The good news is that these entrepreneurs can protect themselves with many of the small business insurance policies available to them.
Having the right professional indemnity insurance should be a concern for any accountant, financial consultant, surveyor, or engineer. Healthcare professionals are no exception to such regulations as HIPAA laws that require them to have these necessary coverages in place.
Today, most business owners consider either professional liability and general liability insurance to ensure that they will not suffer severe financial losses during unfortunate situations. Learn more about different types of business insurance with Assurance Standard today!