Every business needs to be protected from financial loss, and one of the most important things you can do to keep your business safe is to purchase a business liability insurance policy.
If you or your employees are responsible for damaging someone else’s property, reputation, or health, you could easily drown in legal bills and medical payments. You need to be protected from financial loss in these circumstances, and that’s where business liability insurance comes in.
What Is Business Liability Insurance?
Business liability insurance—also called general liability insurance—is designed to protect your business from financial loss.
Your liability insurance policy offers protection against the high cost of lawsuits, which can easily be devastating for the financial interests of a company. If you or one of your employees causes damage, injury, or loss to another business or to a customer, business liability insurance will help cover the cost of a legal defense.
Expensive legal fees and medical bills can quickly add up and be overwhelming for a small business. Insurance protects you from those expenses. That’s why we recommend businesses in all industries across Michigan invest in liability insurance.
What Does Business Liability Insurance Cover?
A typical business liability insurance policy covers expenses related to a variety of claims that may occur during normal business operations:
- Property damage: If you or an employee damage someone else’s property
- Medical payments: If an accident occurs on your property or due to your business operations and causes injury
- Bodily injury: If someone other than an employee gets hurt at your business
- Personal injury: If you or an employee damage a person’s reputation through slander, libel, false arrest, an invasion of privacy, etc.
- Legal defense costs: If you defend your case in court and need to pay attorney fees, compensatory damages, punitive damages, etc.
- Advertising injury: If your business’s advertisements damage a competitor
If you believe your business has areas of risk that are not covered by your liability insurance policy, consider purchasing additional coverage. For example, if your industry works with sensitive data, you may want to protect yourself from financial loss associated with data breaches.
How Much Does Business Liability Insurance Cost?
Your business is unique, and so is every business liability insurance policy. The best way to find out how much business liability insurance will cost for your company is to get a quote from an experienced insurance agency.
However, there are several factors that influence your business liability insurance costs. Together, these characteristics will contribute to the bottom line.
Industry
Some industries are inherently riskier than others. If your business is in an industry with a high level of risk, expect to pay more for liability insurance.
Location
Business liability insurance rates will vary based on location because each state has laws about coverage levels and policy requirements. Additionally, if you are based in a high traffic, high crime area, your premiums will likely be higher.
Years in Business
The financial health and longevity of your business can also influence the cost of your insurance policy. A business with years of experience shows stability, which can lower premiums. On the other hand, a newer business without much experience may have increased rates.
Number of Employees
From an insurance perspective, more employees amount to more opportunities for risk. Larger business with a higher number of employees can expect to pay more for liability insurance than a smaller company with just a few employees.
Claims History
A business with a history of liability insurance claims means it is either inherently risky or not appropriately mitigating risk. Either way, businesses with several claims to their name will likely have higher insurance premiums.
Business Operations and Revenue
Insurers want your business to be successful, but more customers purchasing your products or hiring your services equals more foot traffic, more interactions with employees, and more opportunities for risk. As your business revenue increases, so will your liability insurance premium.
Coverage Limits and Deductibles
As a businessowner, you get to decide how much coverage you want to purchase and what deductible you want to pay. Whatever options you choose will impact the cost of your liability insurance policy.
Contact Melton McFadden to Get a Quote for Business Liability Insurance in Michigan
At Melton McFadden, our experienced insurance professionals are ready to guide you through the process of choosing a liability insurance plan for your business. We can help you identify areas of financial risk, find gaps in your current insurance policy, and create a solution that works best for you and your company.
Whether you need to develop a business liability insurance plan or secure additional coverage for your business, were here for you every step of the way. Contact us today or request a free quote to get started.
