As a business owner, you probably feel like you have to have insurance for everything! For your company vehicles, for your office, for your employees—there are even policies now specifically created to protect your cybersecurity. However, when you understand what those policies cover, as well as the potential risks of being uninsured, everything starts to make a little more sense.
General Liability Insurance
This is the big one that most people think of when the term “business insurance” arises. It covers your company in the event of several more common legal issues, such as when a person is injured in or around your place of business. It can also protect against lawsuits relating to damages you or your employees caused to another person’s property (this is big for contractors), as well as advertising-related claims. This can extend to libel, misrepresentation, copyright infringement, and a host of other matters.
Essentially, this is referred to as general because it applies to issues that affect all businesses. Though the premium may vary depending on the size of the company, even the smallest business can incur significant costs if it becomes entangled in a legal battle. This insurance is comprehensive in that it covers both potential legal fees, as well as the settlement itself—should it come to that. However, this type of protection typically only applies in situations where a third party is bringing the suit, not an employee. For internal, human resources related matters, that’s actually a separate policy.
Professional Liability Insurance
You may know this type of policy by another name—such as Errors and Omissions (E & O) coverage or malpractice insurance—which can vary based on your industry. Basically, this covers the goods and services you provide, so if there are any issues, you’re not wading through legal battles on your own. This can relate to accusations of:
- Negligence
- Contractual violations
- Mistakes/errors
- Poor workmanship
Unfortunately, these are some of the most expensive lawsuits a business owner can face, whether your company is large or small. Additionally, the claims don’t even have to be true to cost you money! Since some of them are a matter of opinion, all it takes is one disgruntled customer to make trouble. Having this type of insurance, though, means you won’t have to cover many of the legal expenses, regardless of the outcome of the case.
Do You Need Both?
Most small business owners with a physical office at least have general liability insurance to protect their interests there. For those who work remotely, or from home, a professional liability policy may seem more important. However, as you can see from the descriptions, the two coverages are completely separate. They don’t overlap to cover the same claims or “overinsure” a business. Since unexpected legal costs can easily bankrupt a small business, you should protect yours today with both general and professional liability coverage. Call us today for a free quote!
