General liability insurance for small business

If you are one of the many people starting up their own small business then the number one thing that you need to find out about is general liability insurance for small a small business. Without small business insurance in place your hard work and plans could all be doomed before they have even got underway properly! This page is a free guide to the types of liability insurance for small businesses designed to help you understand how these work before you go ahead and make your small business liability insurance purchase. We will also discuss what determines small business insurance rates.

For more information on other types of business insurance or liability insurance please see our dedicated pages.

Sadly in this day and age people do not think twice before they try and sue you and this can be for any number of reasons, all of which can lead to a frivolous lawsuit that is going to cost you and your business a lot of money. Such lawsuits can occur from injury or damage to clients or their property, employees, visitors or vendors on your business premises or by any acts of negligence by an employee that causes injury or damage to a client or their property. The cost of a lawsuit can run into millions and without the correct type of small business liability insurance in place it will be near impossible to cover such costs and be able to survive beyond that point.

It is critical to assess your liability insurance for small business needs thoroughly to ensure that you take out adequate cover. It is possible to take out an umbrella liability insurance policy in order to counteract any shortfalls in the level of cover that your general liability insurance for small business may have.

There are four main types of liability insurance that need to be taken into consideration when you are looking at taking out liability insurance for small business, these are as follows:

General liability insurance for small business

General liability insurance is a more basic and comprehensive insurance policy for your small business. Every day your business faces certain liabilities that can result in claims made against you for damages. The best form of protection for your business and it's assets is general liability insurance for small business. General liability insurance covers any claims against you that have resulted in injury or damage to a third party or their property. This type of liability insurance policy is commonly provided with property insurance so as to protect your business against any such occurrence on your own premises or any other locations where you would carry out business. A general liability insurance for small business policy will help your business to carry on functioning whilst it faces dealing with any genuine or bogus claims that may have occurred due to any such errors as outlined above. If a client was ever injured on your premises you could be in line for a big lawsuit against your business and if you were found to be liable, general liability insurance is critical to ensure you have protection against any such claims and the costs that arise from them.

There are four primary features that this type of liability insurance will cover and these are:

• Advertising injury - Covers the cost of damages done in the course of spoken or written adverting that disparages, libels or slanders another person's or organization's goods, products or services.
• Personal injury - Covers your and your business against any negligent acts and/or omissions which result in libel, slander, invasion of privacy, or false arrest suit, against a third party.
• Bodily injury - Physical harm that may come to a client or third party caused by your business or it's employees.
• Property damage - Damage to the property of a third party caused by your business or it's employees.

Professional liability insurance

If your small business is in the service industry then professional liability insurance for small business is critical. Professional liability insurance will protect professionals from any claims made against them personally due to any mistakes made whilst they are carrying out their services. This can come in several different types of policy such as malpractice insurance such as nursing liability insurance for nurses, errors and omissions insurance used by a number of professions including IT consultants and financial advisers.

Product liability insurance

When you are looking at liability insurance for small business it is very important to think about product liability insurance if your business is one involved with a manufactured product. This type of small business liability insurance will cover your business if an item that your business manufactures or develops is responsible for some sort of accident injury or even death or somebody. Even the smallest of products can pose a threat to people. How safe you make your product is something taken into consideration when assessing your small business insurance rates.

Employment practices liability insurance or Employer's liability insurance

This type of liability insurance for small business will cover you the employer against your actions from claims made by employees or other business associates. There are a variety of different reasons why an employee or ex-employee may decide to take legal action against you, for instance wrongful dismissal and sexual or racial discrimination.

This type of liability insurance for a small business can be obtained in one of two formats known as 'claims-made policies' or 'occurrence policies'. The former of these can cover a claim that is made several months and years following the alleged incident. The insurer are obligated to review any such claims at such a later date as long as the alleged incident was during a time that the policy was in force. The latter, 'claims-made policies', will provide cover whilst the policy is in force and claims made during that period of time. It may be possible to claim on incidents within a stipulated time period, this is called 'prior-car coverage'. Premiums for claims-made policies' are usually cheaper.

Small business insurance rates

Small business insurance rates will vary depending on the size or your business and it is not possible to provide even an average rate.

The factors that determine small business insurance rates are:

• The size of the business
• How many people your business employs
• The industry your business trades in
• The sector of the industry that your business trades in
• The revenue of your business
• The types of small business liability insurance that is required

When you are obtaining a quote for small business insurance rates you will be asked to provide the above information at least in order to obtain a premium so please be aware of this when you are leaving here and going to a quotation website as it will save you time and trouble.

We hope that this page on general liability insurance for small business has been helpful to you. If you require any other information on types of business insurance, other types of liability insurance or even public liability insurance for employed people please see our dedicated pages.