Whatever type of business you operate, you will likely need liability insurance. If you run a retail store, for instance, you will need it for customers entering and exiting the property. You may be an independent home renovator. With a career like this, you will need it to offset any problems arising from wrong repairs. Even independent delivery drivers need commercial liability insurance. For example, Amazon Flex insurance protects you after a collision. Selfgood explains how Amazon Flex may benefit you and your business.
Liability insurance is critical. Without it, you are likely financially liable should someone ever bring a lawsuit against you. Lawsuits get expensive and cause a lot of stress in the process.
Keep reading to learn further why liability insurance is essential. For starters, read a brief overview of what liability insurance includes.
What Is Liability Insurance?
Liability insurance covers the insured party against suits. For example, the lawsuit may involve property damage or personal injury. There are different types of liability insurance, such as:
General Liability Coverage
The first type of liability insurance is called general liability coverage. General liability coverage protects you against damaged property. It also protects against injuries someone else sustains while on your property or in your vehicle. For example, a policy like Amazon Flex coverage protects you if you run a delivery service. If you are ever involved in a collision, the contract covers you according to the agreed-upon limits.
The second type of liability coverage is professional coverage. Professional coverage is equally as important. It protects you if a customer sues you for malpractice or faulty work.
What Can Happen if You Don’t Have Liability Insurance
Anyone who is self-employed and who does not have liability insurance puts themselves at risk. They can be held financially responsible for accidents or mishaps.
In the worst case, you may have to go through a lawsuit. If you lose a lawsuit, the other party may hold you accountable for paying legal costs. Finally, depending on your claim type, you could be liable for medical expenses. Liability insurance can put your mind at ease. Your assets stay protected in the event of an injury or if someone sues you.
What Liability Insurance Covers
Liability insurance covers a variety of business assets.
- Personal property, such as a car
- Inventory or client deliverables
Simply put, liability insurance covers you and your property during unexpected situations. You receive the funds needed for situations like your business equipment gets damaged. With insurance, you can rest easy knowing your business assets stay protected.
Liability Insurance Helps Your Business Grow
Liability insurance protects you against a lawsuit that could prove disastrous. It also enables you to attract new customers. For instance, many clients seek self-employed service providers. They look for ones who are either bonded or who have insurance. Being insured provides a potential customer with a certain peace of mind. If anything goes wrong, you can recover financial losses or personal injury.
Also, liability insurance lets your customers know you care about them. They know that you are a professional and that you take your responsibilities seriously.
Liability insurance is also vital for establishing your reputation or brand. It’s a way to differentiate yourself from self-employed contractors who might not have their customers’ best interests in mind.
Liability Insurance: Protecting More Than Just You
A self-employed contractor will grow their business if all goes in their favor. When that happens, they may need to hire additional employees. When you hire other contractors, your responsibility increases. With increased responsibility comes the need for insurance. For instance, liability insurance ensures that when things go wrong, the livelihoods of your employees stay protected. It also ensures that the business and paychecks may continue in a lawsuit.
Takes Care of Your Family
Even if you run your business as a lone contractor, liability insurance helps protect your family against claims against personal property. For example, a lawsuit against you might involve financial damages. The damages may exceed your current capital if you are self-employed. A situation like this may force the sale of your house. You may lose a lawsuit. If you aren’t covered by liability insurance, you might owe tens of thousands of dollars out of your pocket. If this happens, it could disrupt your spouse’s and your children’s lives.
In short, you might be self-employed but not living your life in complete financial isolation. Your success impacts the people you love. Similarly, your financial ruin affects more people than just you. Consider how your business affects others and obtain quality liability insurance.