To be straightforward and truthful, not having a general liability policy for your business is just plain dumb. There is no other way to say it, when you have put in the blood, sweat and tears, the money and the time building your business just to let it all fall apart from one situation, one accident it just doesn’t make sense.
The statistics are clear that 40% of businesses will not recover from a disaster or a lawsuit if they are not sufficiently covered in the event of a claim against your organization. The most exposed, are people that run their business from their home and having general liability can greatly mitigate the losses that you could incur from a suit.
Being found liable for bodily injury or property damage to a third party can cost upwards of $500,000.00 and of course there are the financial losses that result in the lost time going to court and dealing with the legal process. Your clients need to know that they can trust you so that they can continue to use your services and refer you as well, and this often comes with being able to show proof of insurance that many of the larger paying jobs will ask you for. Having this type of insurance even at the lowest limits gives potential clients a sense of assurance that you are a professional and that you care about their interests as well.
It is important to know what type of risk you have and understand what insurance limits are appropriate to purchase that will provide adequate coverage based on the type of exposure your profession puts you in. For example, an interior decorator does not face the same type of risks that a roofer does so they would probably have a policy that is significantly lower in price. The types of risk you should be concerned with are not only for the work that you do but also for others damages such as:
- Product liability insurance:This is something that you would think is covered in your policy but it is not always covered or the limits may be severely lacking.
- Cyber and Data Risk.You may not think you are not holding onto private or important information for the client that you just provided – let’s say temporary workers to – but that transaction had a large share of sensitive information. You do not want to be financially responsible if you have cyber-attack.
- Errors and omissions (E&O) insurance:You do not want to be at financial risk because one of your new employees who is still learning the ropes gave some bad advice that might have caused financial loss to a client.
- Property insurance:Those tools that you use, or property that you store them on, may not come to mind as an important part of your business insurance but if you have property you rely on to complete your services you must have them covered to protect you.
- Equipment breakdown insurance: This seems repetitive, but in the event of a loss of equipment, you still need to consider if they have breakdown and need servicing.
- Commercial auto insurance:This goes without saying, if you know you need to have personal insurance on your vehicle then you should know you definitely need commercial coverage on vehicles that are used for jobs. This policy is not the same as your regular one and it covers you in ways that most likely you do not want to be caught without.
So in conclusion, getting a general liability policy which only costs a very small fraction of the amount of revenue your business generates is just smart business. You have come a long way and you are about to have a successful career for yourself. Don’t let it all slip away because you wanted to cut some corners, be good to yourself and your business.