When choosing business insurance coverage, you should consider the nature of your business operations, says the
Insurance Information Institute (III). For instance, if you're a home-based accountant who works virtually with clients, you don't have the same insurance needs as a business owner who runs a restaurant. Here are some things to consider when deciding whether your business needs commercial liability insurance.
Business Insurance When Do You Need It and When You Don't
Before you purchase a commercial liability policy, you should answer the following questions:
What potential risks do I face in my line of business?
Do I have employees?
Do contractors and customers visit my premises/home?
What equipment do I use for business and how much are they worth?
Do I use a vehicle(s) in my business operations
Do I store customers' personal and financial data on my computer or via cloud computing?
The answers to these questions will help you figure out how to insure your home-based business or any other type of business adequately.
Commercial General Liability Insurance
Whether you run a home-based business or rent a commercial property, you should get liability insurance. The policy protects your business from
third-party injury and property damage claims.
For instance, if you hold meetings with your sales team in your home, you can be held liable for injuries that occur to them while they are on your premises or the damage to their property that may happen while they are on your property. For instance, one of them might slip on your carpet and fall or you may accidentally spill coffee on their pricy phone. Your business will be held liable for the damage or injuries, meaning the salesperson (third party) may seek compensation for property damage or bodily injury. If you're at fault, the cost of litigation associated with such claims could leave a significant dent in your business finances. With a general liability policy, you won't need to pay legal costs out-of-pocket.
Reasons to Have Liability Coverage Even if You Have No On-site Customers
There is a common misconception that you don't need commercial liability insurance if customers don't visit your property. Here is why you need liability insurance regardless of whether you host customers or not:
Third Parties Will Still Visit Your Business
Even if you have no on-site customers, other third parties such as neighbors, maintenance workers, contractors, or salespeople may visit your business premises, and they might suffer injury or property damage while there.
Liability When Visiting Others
Even if customers hardly visit your premises, you still need to run business errands, visit vendors, meet customers, or attend trade conferences. While you're out for business reasons, you may accidentally knock over your customer's expensive laptop.
Liability to Neighbors
There are many ways you can cause injury or property damage to neighbors. For instance, you may leave your equipment on a walkway and cause injuries.
Slander
Your advertisement may lead to a third party suing you for slander, which is also covered under a general liability insurance policy.
Even if you do not have customers on-site, your business is still exposed to liability risks. At
CF&P Insurance Brokers, we will help you find commercial liability coverage that suits your needs.
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