How to insure your business

A small business owner should carry a general liability policy to protect against different types of liabilities. From time to time, accidents due occur or someone will try to sue you for something. In order to protect you, the small business owner against claims, a liability policy is a necessity. To purchase such a policy, you must go through an insurance agent.

1. The agent will inquire into the type of business you own to determine the type of insurance protection that you need. Once this is determined, the premium is calculated.

2. Once the type of policy has been establish, the agency will sell the policy to you. The policy is a contract, so it is important that you understand the terms and conditions of the policy. Have the agent go through the policy with you so the terms and conditions are fully understood.

3. The most common small business policy is Commercial General Liability (CGL). This type of policy protects the owner against accidents that occur on the owner's property or leased premise.

4. It can also protect a small business owner against liabilities as a result of a product the business sells, which results in bodily injury or property damage. For example, if a customer were to slip and fall due to a water spill, the small business owner would have protection against a claim that the injured party may pursue through the CGL policy.

5. If the business is a restaurant and a customer bites into a foreign object, the owner is protected by the CGL policy under the products liability section of the policy.

6. The policy protects the owner against accidents sustained by a third party, which is what a claimant is considered. If you elect not to purchase a liability policy, you may be held personally liable to the injured party.

7. Depending on the injury, this can be a detriment to your entire business and can cause the failure of the business. You would be forced to compensate the injured party for any injuries sustained or property damage. The amount paid to the claimant is dependent on the severity of the injury or the amount of property damage.

It is highly recommended that you purchase a general liability policy to protect their assets when an accident occurs.