By the Numbers: Explaining Why Liability Protection Is Vital for Your Business
What if your business was doomed before you even opened the doors?
If you don’t have the right liability business insurance, that’s exactly what will happen. Without proper liability protection, all it takes is a single accident and subsequent lawsuit to put you out of business.
Despite this, many entrepreneurs don’t realize how important liability protection is for the business. Does that sound a bit like you? Keep reading to discover, by the numbers, why you need the business protection of good liability insurance!
Costly Accidents at Your Business Can Cost Big
General liability insurance helps to protect your business in the event of accidents on your worksite. One of the most common ways people get hurt are “slip and fall” accidents where visitors get injured after falling down.
Often, these injuries are very minor. However, if the person who fell thinks it’s your fault, they may decide to sue you. These lawsuits quickly get very expensive!
For example, the average cost of a slip-and-fall claim is a whopping $20,000. Even if your business is found innocent of any wrongdoing, paying for your legal defense out of your own pocket can quickly bankrupt you.
With liability protection, though, your legal costs are covered, and you no longer have to worry about a single accident (that may not even be your fault) destroying your company.
Mitigating the Risk of Reputational Harm
Sometimes, things aren’t as straightforward as a slip-and-fall accident. For instance, someone may decide that your business caused them some kind of reputational harm. This is becoming more and more common based on things like how businesses choose to interact with people on social media.
If you get hit with a reputational harm lawsuit, the costs can be immense. In fact, the average cost of these claims is $50,000. That means protecting yourself from those saying you did reputational harm is 2.5 times more expensive than protecting yourself against a slip-and-fall claim!
As with the slip-and-fall lawsuits, your business is likely to go bankrupt if you have to pay for a legal defense out of pocket. If you have liability protection, though, you get the coverage you need to protect yourself against these claims and get back to running your business.
Getting the Edge on Your Competition
To run a successful business, you need to understand your competition, including how to get the edge on them. What if you could gain an advantage simply by getting liability protection?
Somewhat shockingly, 44% of small businesses have never had insurance. Such businesses are at major risk in the event of an unexpected accident or other claim.
Remember, your competition is facing the same risks you are, including the risks of getting sued for things like slip-and-fall accidents or reputational harm. As we have discussed, even successfully defending themselves in court will put most business owners out of business if they have to pay for everything out of pocket.
Long story short? You may face the same risk as other businesses, but you can choose to give yourself the liability protection that nearly half the small businesses refuse to get. In the long run, you are likelier to outlast the competition because you took the time to protect yourself when they did not.
The Likelihood of an Employee or Customer Filing a Claim
When something goes bad for a small business, the owner often asks a simple question: “Why didn’t I get liability protection when I could?” The honest answer to this question is almost always that the owner did not think he would ever have to file a claim. Therefore, paying an insurance premium each month may seem like an unnecessary expense.
However, filing a claim is far more likely than you might think. Across the lifetime of your business, you are likely to have to file a claim sooner or later.
As we have detailed, all it takes is a single claim for your liability protection to more than pay for itself. Considering that a single liability-related incident can put you out of business, this insurance is worth it for peace of mind alone!
Business Liability Insurance: More Affordable Than You Think
As we outlined above, many business owners hold off on getting the insurance they need because they worry about the ongoing cost of insurance. This is especially true of small businesses where every dollar matters. When you’re struggling to get the business off the ground, it’s understandable that you would worry about having to pay a large monthly premium month after month.
Here’s the thing, though: The premium is likely to be much smaller than you think. In fact, a combination of general liability and property coverage costs small businesses an average of only $500 each year. Just compare that cost to some of the other numbers we have already reviewed!
A slip-and-fall accident claim averages $20,000. Reputational harm claims average $50,000. Compared to these amounts, paying a few hundred each year for the protection you need is really just a drop in the bucket.
You have likely worked several years and countless hours to create a successful business. Unless you want to lose that business overnight, it’s important to give yourself the liability protection you need.
Get the Best Business Liability Protection Today!
Now you know why liability protection is so important for your business. But do you know where to find the kind of protection you were looking for?
At InsureOne, we’re here to take care of all your business insurance needs. We are always ready for you to get a business insurance quote online. Alternatively, you can pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to come into one of our convenient nearby offices!