Why You need General Liability Insurance for Your Small Business

As a business owner, there is a lot you need to think about and worry about daily. There is your staff, ongoing projects, clients, suppliers, rent, and about a million other things. Unfortunately, you don’t have time or room in your brain to worry about all possible scenarios that could end up damaging your business. That’s what business insurance is for. It gives you the peace of mind that you are protected against certain risks. 

Business liability protects against negligence claims if someone is injured or has their property damaged because of your business. It could be that they slipped and fell on your property or an employee knocked something valuable out of someone’s hands. Whatever the reason, this coverage helps against any of those unpreventable scenarios. It’s never a good idea to avoid paying for protection. Here’s why you need general liability insurance for your small business, in case you are thinking of not getting it. 

A Lawsuit Could Devastate Your Business

Operating a business without insurance is like walking a tightrope without a net. Sure, you might make it to the other side, but if you fall, then it will be the end of things. When it comes to your business, even a relatively small lawsuit could be financially crippling. The cost of a lawsuit isn’t just about the final amount the complainant claims. To defend yourself, you will also need to pay for your legal costs, such as lawyer hours and witnesses. 

Lawsuits don’t tend to get settled quickly, which means those costs could be eating away at your for years to come. Then, if your defense isn’t successful, you will need to pay out for damages if you make it that far. Many businesses declare bankruptcy because of legal costs that they aren’t able to cover because they don’t have insurance. You certainly don’t want to find yourself in such a situation. 

Anything Can Happen

Personal injury claims make up a lot of the cases for which general liability is used. For example, a customer could come onto your property and trip, leading to injuries that cause them to miss work or that affect their quality of life. They may then make a claim against you for any lost wages, medical bills, and pain and suffering. However, if they tripped because of negligence on the part of your business, then there is a good chance they will win in the end. 

Of course, any business should have strong safety measures in place to prevent these situations. You’ve undoubtedly seen “wet floor” signs in various places you’ve shopped and visited. You might think that if you are extra strict with these precautions that, you can avoid any incidents and therefore save money on your insurance. However, this is dangerous thinking. The fact of the matter is that accidents happen no matter how many precautions you take. Your safety standards could make it unlikely, but all it takes is a minor lapse or an error on the part of you and your staff. For example, a wet floor sign could be picked up before the floor is completely dry. If something happens, you will be held liable. 

It’s Not Just For Injury or Property Damage

Aside from injury or property damage, there are other risks that your liability insurance can cover. For example, if you store client, patient, or staff data in the cloud, then there is always the risk of a data breach. If the people affected have suffered a financial loss somehow, they could make a claim against you. Liability coverage can also protect you against claims of causing reputational harm. This is a care where something you have said in an interview or posted on social media or marketing content is constructed to have defamed another party. 

Every business is different and has different risk exposures. If you have a small business, then you can get liability insurance coverage tailored to small businesses that fit your situation. You can add data breach and reputational coverage if needed or go without if you do not. It’s vital that you get the coverage you need, but that you also aren’t paying for coverage that you don’t. 

It May Be The Law

You can’t afford the time or money to deal with preventable challenges when you are a small business. In some states, it is against the law to not have liability insurance. This is meant to protect people who are the victims of unfortunate incidents, but it also protects businesses. The plaintiffs can be assured of their compensation if they win their case, and the business can ensure their survival if they lose. The last thing you want as a small business is to deal with regulatory authorities if you don’t have the insurance in place that you are required by law. 

You Can Be Sued For Anything

You might have the best safety procedures in the world. You may also have the strongest protections against data breaches that are humanly and digitally possible. However, that doesn’t mean that you can’ get sued. Anyone could sue you for any reason, even if you have done nothing wrong. If that happens, you may be victorious in the end. However, you will be paying attorneys and other legal costs that could be sucking your business dry during that entire time. We would like to think that frivolous lawsuits would get thrown out easily, but that is not always the case. Theoretically, a competitor, a disgruntled former employee, or an angry customer could file a suit against you for vindictive reasons. Do not leave yourself vulnerable. 

Cyber Attacks Aren’t Going Away

The fact is, the more digital our world becomes, the more unscrupulous people will try to take advantage. There is a long trend of cyber attacks increasing every year, which means you are more than likely going to be a target of many throughout the life of your business. Criminals are also getting more resourceful, meaning it’s tough to keep up with their methods. Without general liability insurance, there is a significant chance that your clients could become victims of a data breach. If that’s the case, then you are the only party they can hold responsible. The actual criminals would most likely be located in another country and out of reach.

As you can see, general liability insurance is one of the most important coverages you can have for your business. Do not take any chances. Make sure that you are protected for anything that might happen.