Starting a business is an exciting venture, but there’s a lot to take care of when you first get going. One issue that you might have overlooked in your quest to get up and running is insurance. Follow this guide to familiarize yourself with the different types of insurance, how they work, and what you need to own and operate your business.

What’s the Purpose of Small Business Liability Insurance?

The most fundamental purpose of insurance is protection. Instead of focusing your time and efforts on everything that could go wrong, you can put all your energy into getting your business off the ground to be successful and profitable.

There are multiple types of insurance for small businesses, but the most important type is general liability insurance. It isn’t a requirement to carry liability insurance in all areas, but it’s an absolute necessity. A general liability insurance policy pays expenses if someone is injured while on your property, or their personal property is damaged due to actions directly related to your business. Other types of liability insurance can ensure further protection. Let’s take a glance at what they are and how they can help you protect yourself.

Types of Liability Insurance for Small Businesses
The broad term of liability insurance can reference a multitude of insurance policies, but what they cover and how they function aren’t always the easiest to understand. Here is an overview of the various liability insurance policies and coverages for small businesses.

1. Public Liability Insurance

Many people combine public liability and general liability insurance, but they aren’t the same thing.
Public liability insurance or PLI pays if you accidentally break something while on a customer’s property, or if someone falls and breaks their ankle because the carpet isn’t secured properly on the ground.

2. General Liability Insurance

General liability insurance or GLI is both product liability insurance and public liability insurance combined in one package. It’s the best way to get an adequate amount of coverage that covers your business in four different scenarios such as:
• Repairing the damaged property of someone who isn’t an employee while at work
• Medical expenses for accidents and injuries at your business or on the job if your business operates at multiple job sites
• Lawsuits from a third-party for sharing photos of a location you worked at or an experience from a client you previously assisted
• Damages from products that you sell or manufacture
These are very general guidelines for what GLI covers. Each company and policy is different. Read your policy thoroughly from the beginning until the end to understand what is and isn’t covered.

3. Professional Liability

Professional liability insurance might be necessary if you end up with a client who isn’t happy with the product or the quality of the job you did. It’s also useful if a customer or client claims that you gave them incorrect advice. It covers damages and legal costs if a client is successful in their case against you. It might apply in a case where a professional trainer pushes their client too hard, and they end up injuring themselves.

4. Commercial Liability

Some refer to commercial liability insurance as another term for general liability insurance. It can also be a combination of three different types of insurance coverage for your business including:
• Public liability insurance
• Property insurance, which will pay for damages to the premises and equipment
• Worker’s compensation, which pays for medical costs for employees if they’re injured while at work
Physical and hands-on jobs, such as electricians or construction workers, would benefit from commercial liability insurance if an employee falls off a piece of equipment or injures themselves while using tools to complete a project. It would also pay for replacing the equipment and anything damaged during the incident.

5. Employer Liability

Employer liability insurance is an essential component of workers’ compensation insurance because, while worker’s compensation covers lost wages and medical costs, the employee might feel the amount isn’t enough and sue you for additional damages. It’s extra insurance against claims against you from employees, and a necessity in any field where the risk of injury while on-the-job is high.

Why Liability Insurance is so Important

One of the first things most clients look at when they decide if they want to hire you for a job or not is if you are insured. You will secure more clients and jobs, and gain the customer’s trust if you present your company as responsible and reliable. Having adequate insurance policies put your words into actions. If you don’t have insurance currently, maybe it’s time to think about how it could benefit your business and save you from a devastating loss that puts all your hard work, money, and time to waste.