Introduction to Business Liability Insurance
Unless you’re a professional, or you’ve owned your business for a while, you probably already know the ins and outs of liability insurance for business. However, not all of us are as seasoned in business terminology. In that case, the chances are likely that you have heard “ liability insurance for business” dozens of times. However, you’ve never fully understood what it means. If you’re in the latter category, this article is for you.
Long term business liability insurance
If you’re starting your own business, it’s an absolute must that you obtain business liability insurance. Business liability insurance is essential for protecting your employees, your property, your business, and your company’s image from unwanted accidents and expenses.
You might be thinking, “What if I’m very careful? Is this coverage really necessary?” To answer that question, here is a true story about a business owner.
Jordan’s small business liability insurance story
For all intents and purposes, let’s call the business owner Jordan. Jordan is the general manager of an entertainment store. This store sells everything from used movies, to used books, to action figures, and everything in between. Jordan has had his business for almost 20 years.
One day, two teenage boys were roughhousing outside of the store. The boys were on skateboards. One of the boys playfully pushed the other. While on his skateboard, the boy crashed into Jordan’s store window. The window was large, spanning almost from the floor to the ceiling of the storefront.
The force of the push, combined with the speed of the skateboard, caused the glass to shatter almost completely. The business was temporarily slowed while the ambulance was called, as well as the clean up required by the store’s employees.
None of this was within Jordan’s control. He was always careful, and he trained his employees to be careful as well.
Property of business and business liability insurance
However, he could never predict that two teenage boys roughhousing outside of his store would damage his property. The long and short of this story is that accidents happen. Accidents are unpredictable and unavoidable, no matter how careful you are or how well you train your employees.
The essence of business insurance
We’ll come back to Jordan later. In the meantime, let’s talk about how business liability insurance is absolutely essential to small business owners like Jordan, or you.
When you start your own small business, it’s easy to be intimidated by terminology and concepts that you don’t understand. You might be asking yourself questions like, “What is business liability insurance? How do I obtain liability insurance for business? Also, how do I know if I’m getting the best rates possible? How do I do right by my business, my employees, and my company?”
Before we continue, let’s first define some key terms that you need to know.
What is business liability insurance?
Insurance, as a general term, is an arrangement that compensates you for specified losses. In your case, these losses can be an employee injuring themselves on the job, damage to your property, customer lawsuits, among many other things.
Insurance and liability insurance
What separates insurance, as a general term, from liability insurance for business? You might have also heard the business liability insurance referred to as “Commercial General Business Liability,” which is really just a different term for the same concept. liability insurance for business covers expenses, such as medical costs, that happen as a result of property damage or employee accidents.