Buying liability coverage for your business can be a confusing and worrisome process. Here are four main guidelines that will help prepare you so you know what to look for and what questions to ask.
1. Understand the coverage you need.
Look at your business’s financial situation so you know what you will require this liability insurance to protect. You need to know how much coverage you need. For example, if your business does ten million in sales annually, a liability policy of one million offers only a small amount of the coverage you would need. But if your company does around one million annually, you don’t need ten million in coverage. Taking the right amount out means you will be able to keep your business running even while fighting a lawsuit.
2. Assess your risks.
The nature of your business will also be a determining factor in how much coverage you need. For instance, a higher risk business like construction will have more risk and so it will benefits from having more coverage. A retail business likely has much lower risk and will not require as much coverage.
3. Understand the coverage.
Many liability policies have two set limits – one that is applied to each lawsuit and a second that is the overall limit on the policy. The way this works is the first limit is applied to each lawsuit you’re hit with; if you are hit with two in one year, the sum of these two lawsuits will be applied to the overall limit of the insurance policy.
4. Compare costs.
It might surprise you to find that it can actually be cheaper to buy more coverage. What you pay for in the initial amount is typically more expensive than what you pay for additional coverage. For instance, a one million dollar policy may cost a thousand dollars per year. If you add another million in coverage you may only have to pay another five hundred more per year.
Call James Campbell Insurance today to talk about your liability insurance needs. We offer free quotes and will make sure you get the right coverage for the right price to protect your business and assets.