Like it or not, we live in a world where many people feel that the only way to get ahead in life is to sue somebody for a lot of money. Unfortunately, if you own a business, the person they are hoping to collect from might be you. It is also true that there are genuine accidents which happen that are nobody’s fault.
In either eventuality, you may want to consider the pluses and minuses of getting some public liability insurance protection. The idea behind public liability insurance is to provide business owners with some affordable protection against injury or damage to a member of the public while they are on your premises.
The classic example of a public liability claim is one where somebody walks right past your “Caution: Wet Floor” sign and slips on the freshly-mopped surface. Even though you must mop the floor at one time or another and took every reasonable precaution to minimise the risk, you may still find yourself in court. If you have a public liability policy, your insurance carrier would pay the costs of defending the claim as well as any damages that may incur up to the limit of their coverage amount.
Since this type of insurance is so affordable, one might wonder if there is any downside to buying it. There are a few factors to consider before purchasing such a policy. The first one of which is that you may not need it. Many businesses already have a so-called general liability policy. This covers many more situations and costs much more, but it does include public liability inside its wider blanket of coverage.
Another factor to consider is that you may have a business which has virtually no interaction with the public on your own premises. If you are an Internet retailer, for example, you may never see one of your customers face to face. In that eventuality, it makes little sense to insure against injury to people who are never there. As for delivery drivers and other service providers, your homeowner’s policy includes some of the same basic provisions against random claims of injury.
If you are in an official commercial setting rather than operating out of your home, it may make sense to CYA just in case. Once again, however, you might want to have a broader business insurance policy to cover you against such things as theft as well as injury to the public.
How you structure your business can also have an effect. If you are a newly-minted LLC with no assets, you might consider holding off on purchasing insurance until you are actually generating some cash flow. As long as your business is covered by some form of legal umbrella, such as a corporation or LLC, any claim against that business can’t touch your personal assets. Nor is there anything of monetary value to take in lieu of a cash settlement. Once you do have something to lose, you should certainly make it a priority to get some insurance to protect what you have gained with all that hard work. It’s best to consult an expert to ensure you get the right coverage. We recommend talking with the staff at Smart Business Insurance about your public liability policy. We used them and were happy with the outcome!