By the Numbers: The Importance of Commercial Liability Insurance

Businessman is protected from liability claims

What if the business you’ve spent years building could suddenly be taken from you? 

That’s what can happen to any entrepreneur who doesn’t take the steps to protect themselves and their business. Because without the protection that comes from liability coverage, all it takes is a single accident to land you in court, where the out-of-pocket costs may very well destroy your business. 

Fortunately, you can protect your own company with good commercial liability coverage. However, many business owners are still on the fence about this matter. Not sure whether you need to pull the trigger and get this coverage? Keep reading to find out why you can’t afford to skip it! 

Commercial Insurance: Cheaper Than You Think 

Running a successful company means looking out for the bottom line. Because of that, some new entrepreneurs skip out on commercial insurance because they worry about the added monthly costs on top of the normal expenses of doing business. 

However, you might be surprised at just how cheap the monthly premium is. For example, general liability insurance costs an average of only $42 per month. If you have a newer, smaller business, you’ll very likely pay even less. 

As you can see, protecting your business doesn’t mean you have to break the bank. With the following breakdown, you’ll discover why this is such a small price to pay for your peace of mind as a business owner. 

How Much Liability Coverage Do I Need? 

Exactly how much you pay for your premium will depend on many factors, including how much coverage you have. But that brings us to a big question: how much liability coverage do you actually need? 

Most businesses (even smaller ones) are better off having one million dollars in coverage. This means that the carrier would pay up to that amount related to a single claim. That may sound like a lot, but as we’re about to review, even simple or minor injuries can lead to expensive headaches for business owners. 

Protection From Bodily Injury Claims 

One of the best things about commercial liability coverage is that it helps protect you against bodily injury claims. Such claims are very common. For example, let’s say that a customer slips and falls at your business and decides to sue you over it. 

The average cost of such a claim is $20,000. If things make it as far as court, those costs go even higher (more on this in a minute). But as long as you have the right insurance in your corner, you won’t have to worry about such a lawsuit sinking your business. 

Attorney helps a man with a collar on his neck from an injury

Protection From Reputational Harm 

In the age of social media, businesses need to be more careful about the risk of reputational harm. It’s not enough just to watch out for your own business. You also have to worry about saying or doing something online that will cause another company to sue you over reputational harm (just another way of making it difficult to protect your brand in the digital age). 

If that sounds farfetched, keep in mind that all a competitor has to do is get upset with a Facebook post or a TikTok video you create to go after you in court. To make matters worse, the average cost of a reputational harm lawsuit is $50,000, but those are costs you can avoid with the right coverage. 

The Cost of Hiring a Lawyer Out-of-Pocket 

Ever notice how so many high-profile lawsuits you hear about end up settling out-of-court? There’s a reason for that: going to court can be very expensive even when you win a case, and you never have a way of knowing if the case will go your way or not. 

Long story short? If your business is facing a lawsuit, you’ll need to hire a lawyer who, with any luck, will keep you out of court. That means you’re probably going to pay $100 an hour or more for a good lawyer. Those hours can add up when you have to pay out of pocket, but commercial liability insurance will pay for the costs of your legal defense. 

The Overall Cost of Defending Yourself in Court 

Remember when we said you generally want to avoid going to court whenever possible? There’s a reason for that, too: court costs may easily hit $75,000 or more. Even if you can get the other party to drop a lawsuit altogether, you may owe thousands in unexpected legal costs. 

Just as liability insurance helps to pay for your legal counsel, it also helps pay for your court costs. For many businesses (especially smaller ones) that end up going to court, this insurance is the difference between the company staying afloat or going under. That’s because even successfully defending yourself in court can bankrupt your business if you’re paying out of pocket. But when you have the right liability coverage, you can rest assured that your legal costs, all the way from consultations to court dates, will be covered. 

Of course, this means you’re effectively trusting the insurance carrier to protect your business. That means it’s worth taking the time to find a carrier that will treat you right. 

Get the Best Commercial Liability Insurance Today! 

Now you know why, by the numbers, commercial insurance is so important. But do you know who can provide the coverage you need at the prices you want? 

At InsureOne, we specialize in protecting businesses just like yours. We are always ready for you to get a quote online. Alternatively, you can pick up the phone and give us a quick call at 800-836-2240, or feel free to come into one of our nearby offices at your earliest convenience!