When you’re asking, do all businesses need professional liability coverage, you may not be thinking about the small home-based businesses, or the vendor on the street, or even the entrepreneur who is just starting out down the road. Most of the time, when people talk about business liability insurance, they are thinking of large, established corporations who hire more employees and are likely to get sued more often. However, this is not the end of where lawsuits originate and in fact, it is probably the minority. Unfortunately, small businesses and independent contractors make up a large portion of the lawsuits that are filed in civil court for various reasons.
When it’s easier to have a court recover your money when you paid for something that seems to be a rip-off, that is the course of action people will likely take. The way the courts work, they may also be able to recover their court costs for originally filing the case. So when you consider this factor, do you still believe that business liability insurance is only for the large companies?
Risks of a Home-Based Business
Here’s another example for you. What if you’re a massage therapist who runs a business out of a portion of their home? What if you have an office set up that is completely massage ready and your clients can come and go without disturbing any other parts of the residence? Now, this is considered a work environment and if they trip, fall, or otherwise get injured, you are financially responsible. They will not care that you are home-based and probably don’t make a large income. All they are going to think about is that they want their medical bills paid and any following treatments covered. This is why it will be extremely important for that home-based massage therapist and every other home-based entrepreneur to carry some form of business liability insurance.
Reasons to Purchase Right Away
Another good situation to consider is a brand new business. You may have spent all your capital on starting your company. You may be brand new to the neighborhood and believe that clients will start to come in slowly at first, and then more steadily later on. For this reason, you may decide to put off this purchase for at least a couple months until you can get established and up and running smoothly. Now, consider what would happen if on your Grand Opening day it was raining and your third customer slips and falls on the sidewalk by the door. Suddenly, you are into at least a couple hundred in medical bills, if not more, depending on how extensive their injuries are. At this point, that 20/20 hindsight is not going to do you any good and you are going to wish you had some professional support behind you. They can help you with anything from a claim to a typical concern.
As you compare these situations, as well as the risk that a large corporation is at everyday, you can decide an easy answer to, do all businesses need professional liability coverage. Most likely, that will be a resounding yes, especially if you want to continue to grow and be a part of the local community. It will be important to shop around and get a premium quote that fits your current range of profit. If need be, you can always start out with a lower amount and then increase it over time. However, you don’t want to leave yourself vulnerable at any time, no matter how small or large your company is.