Whether you sell food or travel tours, your business must assume responsibility for the risks associated with delivering these products or services to customers. The most straightforward way to manage these risks is to do a good job and keep your business activities as safe as possible for everyone involved. But for events and circumstances that you can't prevent, business liability insurance provides you with an extra layer of accountability and protection.
Business Liability Insurance Definition
Business liability is an insurance policy that covers your business in case it accidentally does harm and creates damage to the property or well-being of anyone who may be affected by its activities. Customers are protected by business liability policies if your products or services injure them, make them sick or do damage to their property. But your business can also harm people who aren't customers. If a pedestrian trips and falls outside your retail store or if your business activities cause a fire that damages your neighbor's property, your business liability insurance can help you avoid expensive lawsuits.
Why You Need Business Liability Insurance
In many situations, business liability insurance is a requirement for collaborating with certain partners. If you wholesale products through retailers, these outlets who sell your products may ask you to provide proof of a liability policy. This paperwork shows them that you are protected and assures them that, in case of mishaps, your company will be able to take financial responsibility. Even when there is no middleman involved, it's a good idea to have liability insurance protection because an incident in which someone gets hurt or sick could easily wipe out your assets or even bankrupt your company. Having liability insurance is also simply the right thing to do. Fire and injuries can be expensive, and it's entirely possible that your business won't have enough money in the bank to cover some of the damage its activities could cause. Having insurance protection is a way of taking responsibility for many of these possible occurrences.
How to Find Business Liability Insurance
The best way to find business liability insurance is through a referral from a company in your same industry, or through a trade organization. You will most likely be able to find a business broker through an online search, but if you use this strategy you'll likely have to comb through ads from companies that may not be the best fit for your business. Prices also vary widely, so talking to someone who has personal experience with a broker who works specifically with your industry can help you avoid randomly searching through listings in hopes of finding a good fit and a fair price.
Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.