Owning a business brings all sorts of complications, from maintaining a location to managing employees to marketing. However, many business owners fail to consider one important detail that has the ability to destroy the business they have worked hard to build.
What Is Liability Exposure?
Liability exposure can be defined as your business’s risk of having to pay for another person’s claim of damage or injury. There are many factors that go into this. For example, if there is a history of people being harmed on your property, then you will have higher liability exposure. If you are in a profession that is routinely sued for large sums, such as medicine, you also will have higher liability exposure.
Does My Business Have Liability Exposure?
All business owners have some liability exposure. The possibility of a customer injuring themselves either on your property or with your products is always present. When you have employees acting on your behalf, this liability exposure increases.
Modern people are increasingly becoming litigious and will sue over small or even imagined injuries, both physical and mental. In some cases, the payout has been more than the worth of the business they are suing.
Can Owners Be Held Personally Responsible for Damages?
Many business owners assume that they are not personally liable for injuries caused by their business. However, this is not always true, even for incorporated businesses and LLPs. You can be held personally responsible and even financially devastated for injuries on your property or your own behavior, even if your business is legally a separate entity. It is important to protect your business and yourself.
How Can Business Owners Protect Their Business?
The best way to protect your business and your financial future is to purchase business liability insurance. This will ensure that any judgments against your business are paid without financial devastation. There are several different types of liability insurance, so it important to talk to an experienced underwriter or insurance agent about your business’s unique liability exposure and needs. For example, general liability protects against injuries on your premises while product liability covers injuries as a result of using your products.
While all businesses carry liability exposure, you do not have to live in fear of losing your livelihood in a lawsuit. Business liability insurance is a necessity in the modern world for all types of business.
“Image courtesy of cbenjasuwan / FreeDigitalPhotos.net”.