Do you need liability insurance for your business?

May 5, 2016

Liability insurance may not be top-of-mind while you’re trying to launch a freelance career, but it’s essential protection for your business that should not be overlooked. In a world where people will go to creative lengths to find a reason to sue, liability insurance can help ensure that your business will survive an unplanned legal battle.

It may seem like another exasperating expense to add to the list, but think about it: if you run into any situation that causes a client to lose money because of bad advice – you could be held responsible for an accident.

It’s important to remember that even if your client sues you for something that is not your fault, you would still incur legal fees. One of the benefits of liability insurance is that it would cover those fees. Luckily, liability can be relatively inexpensive: most plans will over up to $1 million dollars for as little as $200 annually.

Take these 4 questions into account while considering whether liability insurance is the right move for your business:

1. What harm could your product or service cause?

Use your imagination and create a Murphy’s Law inventory of everything that could go wrong from the moment a client walks in the door.

Because all liability insurances are not the same, you will need to know just what hazards your business could incur in order to protect yourself against legal retaliation.

2. What types of coverage apply to your situation?

Because liability insurance is relatively complex, it may be helpful to work with a certified insurance broker to decide which kind you need. A maker may benefit from product liability coverage while a vocal coach may only need slip-and-fall coverage. Anyone with content and copyrights on the web might want to take on cyber liability coverage.

3. Do your contracts require it?

Clients or vendors of your products and services may require that you carry liability insurance. Get to know the norms in your industry – as well as the pitfalls.

4. How big is your business?

If you have employees, you’ll need a couple different types of liability coverage in the case of employee injury or discrimination claims.

Ultimately, it’s worth reviewing your business then getting in touch with an insurance agent to discuss your options. You can learn more about our liability insurance offerings here.