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When Does A Company Need Commercial Liability Insurance?

When Do I Need Commercial Liability Insurance

Starting a new business can be one of the most rewarding things a person can ever do in their lives. You can be your own boss, not have to deal with gridlocked bumper-to-bumper traffic, and get to control your own financial future. But if starting your own business is rushed and not carefully planned out, it can cause financial ruins to you and your family. One sure-fire way to hedge against your new business running into ruins (which cause you to close your doors before you even get started), is to get commercial liability insurance. But when does a company need commercial liability insurance?

For example, if you’re a home-based business such as a quilt maker and you work out of your basement and never see your clients, you have a low risk of being sued. Getting commercial liability insurance isn’t as dire for you to obtain. But, liability insurance isn’t just to protect a business from getting sued. It has other coverages too that can protect you from product liability claims, property damage you may cause, and reputational injuries; this is slander and libel. So in this scenario, the need for liability insurance isn’t dire but would be nice to have for peace of mind.

However, if you are a large or small business in ANY industry that frequently deals face-to-face with clients, vendors and customers, your company needed liability insurance like yesterday. You can be the most honest person, have the best products in town, or even donate large portions of your yearly salary to children’s foundations, it doesn’t always matter. If someone thinks they can get an easy payday compliments of your business, there’s a chance they may sue you. We live in a highly litigious society today and suing someone has become as easy as changing your socks.

Another reason why a company needs commercial liability insurance is for the “real” unavoidable injuries a client, vendor or a customer could face. These accidents include:

  • The common slip and fall
  • Injuries on or around your premises
  • Some contract dispute issues

Commercial liability insurance can protect your business from all these real issues that sometimes are unavoidable. Officially, most commercial liability policies will cover a business from claims of:

  • Bodily Injury
  • Property Damage
  • Products liability
  • Contracts
  • Liquor Liability
  • Medical Expenses

For companies that frequently see their clientele on premises, getting sued is something you may have to deal with if you are in business long enough. In the event you are ever sued, a commercial liability insurance policy has funds available to cover the cost of a lawyer to defend you in court. The policy can be used to cover court costs and fees too. In the event you were to actually lose the case and had to pay a hefty settlement to a now “former” client, the policy would pay off the entire settlement, up to the policy’s limits of liability. If you needed more funds to pay off the settlement, you would have had to have a commercial umbrella in place prior to the claim against you. But can you really beat that? Getting a lawyer, getting all your court costs and fees paid, getting your settlement paid and not on your business’ coin? Priceless!

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