Protecting Your Business From Litigation, Are You Under-Insured?
Feb 2, 2017
Litigation brought against a business can have serious financial consequences. For small businesses, one civil litigation claim may be enough to put the owner out of business. That is why insurance is so important to business owners; it helps protect them when paying out damages and sometimes it covers associated legal fees as well.
Unfortunately, many small business owners do not know how much coverage they currently have, let alone the amount they need. Many who have incorporated their business have taken prudent steps to limit liability, however, this does not preclude the need for adequate insurance coverage, tailored to your business.
In order to best manage the risks for small business owners, they should be aware of their insurance coverage beyond just standard property and auto insurance. Often, the following categories are overlooked or underinsured.
Liability insurance protects your business in a situation where your business is sued for damages for a mistake on the part of yourself, your employees, your equipment or your suppliers. There are different types of liability insurance, including General, Product and Professional. General liability covers injuries to clients or employees on your property. Product liability refers to situations where your product is defective or causes serious harm to its user. Professional liability insurance protects you if you, your business or your employees committed an error or were negligent when performing professional duties.
Key Person Insurance
Small businesses tend to rely on a few employees to run successfully, particularly in the early years after the company is founded. The loss of one of these key employees could be devastating for a business. That is why some businesses take out key person insurance on key employees. This operates the same as life insurance, with the business paying the premiums and becoming the beneficiary of the insurance. Key person insurance can be the difference between a company surviving and going under. Other types of insurance to consider for key employees are disability insurance and critical illness insurance.
If you have a small business and are worried you may be underinsured, talk to one of our Niagara Commercial Litigation lawyers today. They are the best tool you can use when the goal is protecting your business from litigation. Furthermore, they can advise you on the specific types of insurance your business needs and which aren’t required.