Liability Insurance Coverage - What is it?
Running a business is no different from anything else in life when it comes to liability coverage;
you can get sued performing on a contract as easily as you get sued for hitting someone's car
or having someone slip on your driveway. As a result, general business liability coverage
insurance is a business operating cost and necessity similar to paying the rent or purchase
goods for resale.
You may run your business perfectly well, always thinking of others and never intentionally
causing harm to anyone, including your clients. Unfortunately, society today simply doesn't
function in the same manner. Lawyers move around looking for business to take on, and the
slightest disagreement can become a lawsuit between parties if one of them is willing to pay a
lawyer's price to escalate the matter.
As a result, liability coverage makes the difference for a business by protecting it from essentially going bankrupt when sued. Litigation costs are
expensive. The average attorney cost just to defend yourself can range between $150 to $400 an hour, depending on which lawyer you hire and what
type of law is involved. Retainer costs to hire a lawyer's services on-call month to month can easily run into the thousands of dollars as well.
Now compound this environment with a simple disagreement you may have with a customer or client. For whatever reason the person simply isn't
happy with your service or product. You go the extra mile and refund them their payment. At this point, many small business owners think the issue is
over and done with - not necessarily. A few weeks later you get a formal letter from Joe Shmoe Esq attorney-at-law demanding a settlement from you
or you will face a lawsuit for intentional fraud or professional negligence. Now what?
General liability coverage gives you an umbrella to fend off these errant litigation storms. If a policy is in place, you turn the issue over to your
insurance provider to deal with. Their lawyers go at it with the attorney sending the letter; they may even convince the attorney it's a bad idea to sue.
However, you don't have to manage the issue alone. This peace of mind is what business liability coverage provides.