Starting a business is a major step usually taken by the strongest entrepreneurs. There are many decisions that go into forming and operating a company. There are also just as many details that must be considered. One important aspect is insurance coverage.
Insurance offers a level of protection that the most solid business plans can’t. Insurance not only guards finances, but provides peace of mind. Business owners can accomplish more if they don’t have to worry about losing everything they’ve built due to unplanned circumstances.
If you own a business, then you should invest the effort into choosing appropriate commercial liability insurance coverage. You’ve probably already invested a lot of time and money into getting your company up and running. Having the right kind and amount of insurance can significantly reduce your losses should you or any of your employees become sued for negligence.
What Is Commercial Liability Insurance?
Before you perform your due diligence and research suitable insurance options, you should know what commercial liability insurance is. There are different types of insurances like professional liability insurance and business liability insurance. Every kind of insurance has its own specialized meaning.
For instance, there might be some confusion between commercial liability and general liability insurances.
General liability insurance basically means that the insured party will pay for what they damage. Commercial liability insurance can protect your business from financial disaster in the event of an unexpected incident.
Why Do Contractors Need Commercial Liability Insurance?
Even though contractors might not be full-time employees, they should still be insured if they’re working for your company. Insurance is the coverage of risk. Every job has an element of risk. Uninsured contractors increase your company’s liabilities. This can be an expensive burden if they injure someone—or themselves!—on the job.
General liability insurance for contractors can cover contractors instead of forcing the company that employs them to shoulder the onus of coverage. Just like business owners, contractors should examine what areas they need insured.
General liability insurance requirements for contractors may vary by state. Again, taking the time to investigate different carriers and their policies is crucial for anyone shopping for liability coverage.
Common Mistakes Made When Purchasing Commercial Liability Insurance
There are several common mistakes both employers and contractors make when it comes to selecting coverage:
- Not researching all of the best small business insurance companies: Exploring insurance choices takes time. Taking the top three insurance companies that appear in search engine results and only looking into those can be a costly mistake.
- Not knowing what’s needed: You have to know what insurance you can afford and what you need covered. For example, if you choose the best general liability insurance for small business enterprises and something specific isn’t covered, then your risk regarding that area is high. Know what you need and make sure you purchase the insurance that covers it.
- Opting for cheap contractors insurance: Cheap isn’t always better, especially when it comes to insurance.
- Looking for easy answers: If finding insurance was easy, there wouldn’t be a multitude of resources that can help people do it. There is no simple method to find the best general liability insurance for contractors. The best general contractor insurance is the one that suits the contractor’s situation.
The Factors That Determine What Commercial Liability Insurance To Buy
Two primary factors will help you determine what kind of commercial liability insurance you should buy:
- What you need covered
- How much money you want to spend
Once you identify and analyze these two factors, then the rest of the process should fall into place. Preparation, like small business insurance, can be the best defense against financial ruin.
You should also keep in mind that cheap small business insurance isn’t always the best. The same can be true about the most expensive insurance. Selecting commercial general liability insurance isn’t an easy task nor should it be. If you take the time to survey what you need covered and what you can afford and apply that knowledge in your research, then you might be able to save yourself money and aggravation in the long run.
You should also consider how much you’re willing to lose if your company isn’t properly covered. Do you have the revenue to withstand a lawsuit? Is your business in a high-risk industry?
Your company’s survival might depend on your insurance coverage. No matter how many safety policies you’ve instituted or the track record of your employees, all it takes is one unforeseen incident to put your company’s future on the line. It’s up to you to prioritize its well-being.