Is Liability Insurance Right for Your Small Business?
We know how important insurance can be in our personal life, whether it be for our car, home, or our health. As a small business owner, it may seem as though you have an endless to-do list, and liability insurance might not sit high on that list. But it should! Having the right insurance can act as your business’ safety net, protecting you and your company from risks that may present themselves in day-to-day operations. Determining your insurance plan now will have your future-self thanking you.
What is general liability insurance?
General liability insurance in Canada is designed to offer your business protection against claims of bodily injury and property damage as they relate to your business operations, your products, your premises or your completed operations. For example, a slip and fall by a customer on your premises may result in a lawsuit against your business for the injury they sustain. General liability insurance would cover the costs connected with that claim or lawsuit.
What is product liability insurance?
Product liability insurance is a type of commercial insurance policy that would protect your business if being held liable for a product you manufacture, distribute, or sell. For instance, if a customer purchases a defective item from your store, brings it home, and injures themselves with the item, they could choose to sue your business. Product liability insurance, can help cover the medical costs for the customer, legal fees if you need to defend yourself, settlements, etc.
What is professional liability insurance?
Professional liability can be particularly helpful to have if your business offers any type of professional service. A customer may choose to hold your business accountable for an error in service or may claim you did not deliver on a service that your business offers. In these cases, professional liability can assist covering the legal costs associated with a related lawsuit or damages. You may think this necessary only for medical practitioners, lawyers, etc., but if you are charging a fee for a service, this type of insurance may be worth considering.
What is cyber liability insurance?
Just like it sounds, cyber liability insurance covers the digital side of your business. If your business endures a cyber-attack, important and confidential information may be at risk. Cyber liability insurance can help cover any lawsuit costs that could result if, for example, customer data is compromised.
How much does liability insurance cost?
The cost of purchasing insurance is far less than covering the expenses of a pricey lawsuit out-of-pocket, and many small business owners are glad to have insurance there to help in those moments. There are several factors that affect how much liability insurance will cost, including:
- The type of business you have
- Your years of experience
- The number of employees you have
- The location of your business
- The amount of income your business makes
- Claims history
The value of purchasing insurance for your small business
The main risk of operating a business without any cover is that you as a business owner could lose money, and depending on the situation, significant amounts. Risk management is an integral part of running a business, and having the right insurance can help cover risks that may be associated with running your type of business.