Insurance and commercial or business responsibility

Operating a small business has its rewards, but it also comes with its fair share of liability, including the possibility of slip and fall lawsuits, claims for defective products, and even employee injuries on the job.

As a small business owner, understanding your responsibilities and obtaining the necessary small business insurance policies is critical. After all, a single lawsuit can potentially shut down a small business forever. The following resources cover a wide variety of small business insurance and liability issues, including how to find an affordable workers’ compensation plan and how to insure a home business.

Overview of corporate responsibility

Liability refers to everything that a small business is legally obligated or obligated to do, a list that typically grows as a business’s revenue increases. Exposure to the following types of liability should be assessed on an ongoing basis:

  • Accidents / injuries to company property (slip and fall)
  • Labor disputes (discrimination, wage and hour, workers compensation)
  • Liability for products (resources)
  • Vehicle liability (company cars, use of private cars for work)

Certain types of businesses carry an inherently higher degree of responsibility than others. For example, a roofing company will likely pay a much higher premium for workers’ compensation insurance than a flooring company. And the more employees you hire, the greater your chances of being hit with an employment-based lawsuit.

Responsibility for acts of employees

Sometimes an employer will be held liable for an employee’s actions, regardless of the employer’s intentions or role in the incident. On the one hand, employees are considered to be under the supervision and direction of employers during working hours. But employers are also seen to have much deeper pockets than employees and are therefore better able to pay compensation or damages.

Securing your small business

Since you can’t avoid it completely, one way to limit your liability is to maintain proper levels of insurance. Like other types of insurance, you pay a monthly premium in exchange for a certain level of protection. When paying for liability insurance, for example, your company probably won’t have to pay out of pocket to defend against an employment-related claim. If a departing employee steals a computer, your property insurance will likely pay for a replacement.

But be sure to conduct a thorough research before purchasing any insurance policy, as important terms and conditions can be buried in the fine print. Remember, the insurer will often look for reasons not to pay a claim, but you must abide by the terms of the agreement. In other words, don’t assume anything that isn’t clearly stated in the contract.

Workers Compensation

Most, but not all states require employers to carry a certain amount of workers’ compensation insurance, which is used to compensate workers injured on the job. States have laws that establish procedures for claims and the scope of coverage. Employees can typically claim workers’ compensation for any injury or illness caused or exacerbated by their work. This includes work performed outside of the typical workplace or even outside of normal hours.

For more information on commercial liability and insurance for your small business, click on one of the links below.

Leave a Comment