A customer trips on the carpet in your store, or your worker gets hurt while working. As they are damaged, these people have all the right to file a claim against you. These can cost you a lot and ruin your company’s image.
Below is the list of common workplace injuries:
General liability insurance can protect your business from lawsuits caused by negligence or someone else’s mistake. Regardless of the niche and size, every company should get this coverage. It gives you peace of mind if anything that can cause financial losses to your business happens. Your insurer will pay for claims regarding injuries and property damages caused by your product, service, or negligence.
When buying general liability insurance, you must avoid common mistakes like purchasing a cheap policy or neglecting workers’ compensation. These can bring you some initial savings, but they can cost you an arm and a leg in the long run. So take your time to choose the best policy and avoid common pitfalls.
Buy Cheap Policy
The cost of general liability coverage can vary greatly. The more employees you have, your premiums will be higher. Also, some industries are considered riskier than others. A retail store won’t pay the same premiums as a construction company.
In any case, the insurance policy needs to cover any claims. So one of the most important things to consider is the coverage limit. If this amount is too low, any claim costlier than that will be your out-of-pocket cost.
If you’re unsure which policy you need, consult an Liability Insurance agent to help you with this decision. Some businesses and niches are specific, so they need policies tailored to their needs. Also, shop around for the best offers and ask about coverage. Paying some extra money every month will be worth the benefit.
Deductibles are out-of-pocket costs you use to cover some small claims. They serve to provide affordable premiums. More info on deductibles, find here. If you don’t use them, but your policy covers all claims, your premium would be too high. That would make this expense a significant burden on your budget.
Usually, insurance providers set deductibles at the minimum amount. But that doesn’t mean you have to choose it. Instead, you can opt for a higher deductible and pay a lower premium. Your choice will depend on your budget and the risks you face.
Not Understanding Policy Terms
When buying general liability insurance, you should know the nuances of different policies. For example, some exclude things like an intended and expected injury. Others have endorsements that narrow the scope of what they cover even more.
You must read the fine print before signing anything and know what you read. Working with reliable insurers can help you understand all the nuances and the coverage of specific situations.
Not Adjusting Insurance as Your Business Grows
Your business’s general liability coverage depends on your goals, cash reserves, contract obligations, and other factors. Also, your business will grow, and your needs will change. So you should review your insurance coverage from time to time. Not adjusting it as your needs change can result in increased costs and coverage gaps. So you should seek an advisor to help you understand your risk profile and modify your insurance policy to your current situation.
Skip Workers’ Compensation
Skipping workers’ compensation when buying general liability insurance would mean lower premiums. But there are many reasons not to do that. These include costs and legal requirements. For example, many states require employers to purchase workers’ compensation insurance even if they hire only one or two part-time employees.
Some employers prefer to take the risk of a workplace injury. These might not happen at all, but the chance always exists. But these companies must prove their financial ability to pay for claims. For example, California contractors insurance requires businesses to have a net worth of $5 million, or at least $500,000 in net profits in the past five years.
Making initial savings when buying general liability insurance for your business may seem tempting, but these can be costly mistakes. Choosing the policy takes time and skills, so don’t rush with this decision and work with professionals to get the best bang for your buck.