Liability Insurance: What It Covers and Why Your Business Needs It
As a business owner, there are plenty of risks that come with running a company. While there is a wide range of business-related factors to consider, you also need to think about the risk of being liable for injury or property damage.
That’s where liability insurance comes in. It can help to protect you from a wide variety of incidents that may result in a lawsuit being brought against you.
Here at Ron Johnston Insurance, we’ll guide you through exactly what liability insurance is and whether or not it’s right for you. Let’s get started!
What is Liability Insurance?
Also known as commercial general liability (CGL) insurance, liability insurance helps to protect your business from financial loss due to claims of injury or property damage.
These injury or damage claims can be caused by your business operations, products, or services. Liability insurance covers the cost of legal fees, medical expenses, and any settlements or judgments awarded against your business.
It’s a good idea for any business to have liability insurance as you never know what is going to happen.
Two Main Types of Liability Insurance
When looking at liability insurance, there are two main types to consider. These are damage and injury liability. While both of these generally come under the umbrella of general liability, it’s good to know what they are.
Damage Liability
As the name suggests, damage liability will cover the cost of any damage caused by your business. Depending on your business, this damage could be caused by a wide number of reasons such as an auto body shop accidentally damaging a high-end car.
The importance of damage liability can depend on the company. For example, it would make a lot of sense for a construction company to get damage liability due to the high chance of accidents. That being said, damage liability is a wise choice for any business.
It would help to cover the cost of repairing or replacing the damaged property. This prevents these claims from coming out of the pocket of you or your company.
Injury Liability
Injury liability insurance covers the costs associated with bodily injury or harm caused by your business.
For example, if a customer slips and falls on a wet floor in your store, your injury liability insurance would cover the cost of any medical expenses, lost wages, or legal fees associated with the incident.
However, injury liability is required for much more than just customers. It can also protect you against claims made by delivery drivers, clients, and service personnel. It can even protect you against liability claims made by your own staff.
Why Your Business Needs Liability Insurance
Not sure whether your business needs liability insurance? Here are some great reasons to get it!
Protects Your Business Assets
Injury and damage claims can be painfully high. Without insurance, you or your business may be required to pay these significant costs. If you don’t have the cash available for this, then it can put your business assets at risk. Having that liability insurance to fall back on protects your business.
Provides Peace of Mind
As with any form of insurance, it will help to give you peace of mind. If an incident happened and you didn’t have insurance, you’d immediately be filled with dread. Insurance means you don’t have to worry and you can immediately let your insurance deal with it. You can get back to running your business without any of the headaches.
Required by Law
In Canada, there are many types of businesses that require liability insurance. These are generally businesses that require a license to operate, such as restaurants. If you’re still unsure about liability insurance, it’s a good idea to check out the law in your area.
Protects Your Reputation
Not having liability insurance can not only affect you financially but it can also affect your reputation too. Not only are businesses expected to have liability insurance but you also need the ability to defend your reputation should a claim be made.
What Happens If You Don’t Have Liability Insurance?
Without insurance, you could be held personally liable for any damages or injuries caused by your business. This means that you may have to pay for any expenses related to the claim, including medical bills, property damage, and legal fees, out of your own pocket.
This can cause significant financial stress on any business, with the potential to face bankruptcy. Not only that, but your business may struggle to secure contracts and partnerships with other companies if they know you don’t have liability insurance.
Is Liability Insurance Right for You?
Liability insurance is an essential investment for any Canadian business owner. It protects your business from financial loss due to claims of injury or property damage caused by your business operations, products, or services.
Liability insurance provides peace of mind, protects your business assets, and may be required by law.
Don’t wait until an incident occurs, make sure to invest in liability insurance today to protect your business and your customers. If you need to look for liability insurance, make sure to contact Ron Johnston Insurance today and we’ll happily answer any questions you may have.