Starting a business entails a lot of details and expenses that are often overlooked when making the initial business plan and budget. Unfortunately, overlooking some of these could be the downfall to your success. One of these items is the type of insurance you purchase for the business. While most people know they need to have general liability insurance, they think it is enough and will cover them if someone is harmed physically, mentally, emotionally, or financially due to a mishap within your business establishment.
You need to be aware of the other types of liability coverage you should have to keep yourself from losing everything. Read on to learn more about business insurance.
Product liability coverage protects you if someone is harmed due to something you made. This could be due to a random flaw in production in which a single or few items are bad, or it could be a problem with the item as a whole. Examples would be someone getting sick at your restaurant due to a shipment of bad meat, or perhaps the wood you use in the skateboards you make cannot withstand the weight of an adult. Both of these issues could cause people to end up injured or worse. The customers have the right to expect you to take care of any expenses. Medical bills of any type are not cheap. Product liability insurance steps in and takes care of the bills for you.
When your business is in one of the service industries you don't have to worry about product liability, but that doesn't mean you are off the hook. There could be damages due to the services you perform. After installing a new air conditioning system in someone's home, a fire due to faulty wiring could be traced back to you or your employee. It is also possible that as an accountant you make a simple mistake while doing someone's payroll that ends up costing that company a lot of money. In these situations, professional liability insurance can help keep you in business.
Commercial Umbrella Insurance
This type of coverage is used when the limits to other coverages have been reached. Instead of having to have higher limits for each type of coverage, commercial umbrella coverage can step in and take care of the overage. An example would be the ceiling of your establishment collapsing due to storm damage. Many people are injured and your general liability will not cover all the medical bills. You can use the umbrella coverage to keep from having to pay out of your own pocket.
Do not dismiss advice from an insurance agent when it comes to the coverage your business needs. Ask questions and be sure to understand what each type of coverage pays. It is better to pay a bit more for insurance than to end up paying a lot of money if something ever goes wrong.