Small Business Liability Insurance 

Running a small business can be challenging enough without worrying about what could happen. Liability insurance is one resource to help mitigate costly incidents that may otherwise financially damage a company.

Understanding liability insurance can help small businesses navigate their risk mitigation strategy.

What Is Small Business Liability Insurance?

Small business liability insurance, commonly called general liability insurance, can offer financial protection against third-party claims that may arise from your business operations. These claims could be related to bodily injury, property damage or other liabilities.

This insurance can help cover the costs of financial losses that result from lawsuits or claims made by external parties, such as customers, partners and vendors.

What Does General Liability Insurance Cover?

Small business liability insurance may include the following coverage:

• Bodily injury and property damage—If someone is injured on your business premises or if your operations cause damage to someone else’s property, liability insurance can help cover medical expenses, legal costs and settlements.
• Personal and advertising injury—This coverage may protect you against claims related to defamation, libel, slander or infringement of intellectual property rights (such as copyright or trademark violations).
• Medical payments—Liability insurance can help cover medical expenses for injuries sustained by third parties on your premises, even if you’re not legally liable.

Why is General Liability Insurance Important?

Small business liability insurance is vital for the following reasons:

• Financial protection—The primary reason businesses need general liability insurance is for financial protection. Legal costs, damages and other expenses associated with a claim can be expensive. This insurance can help cover the costs.
• Credibility—Having liability insurance shows your prospective clients and customers that you’re a safe bet.
• Contract requirements—Many commercial leases require businesses to have liability insurance. It’s also common for client contracts to require it, especially if you’re in industries like construction or consulting.
• Peace of mind—Knowing that many common risks are covered can give you peace of mind, allowing you to put more of your focus on day-to-day operations.

How Much Is Liability Insurance for Small Businesses?

Several factors, including the industry type, business size, location, coverage limits, claims history and risk profile, determine the cost of liability insurance for small businesses. Contact Sunstar Insurance of Arkansas for a policy quote tailored to your specific operations.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.