Running a small business is a balancing act. There are many responsibilities to manage, including risk management and insurance coverage. Most small businesses need a combination of policies, including general liability, business owners policy (BOP) and property insurance. A BOP typically includes general liability and business interruption insurance. Other common coverages include copyright infringement, third-party bodily injury and reputational damage.
A small business owner can be sued for financial loss from business activities. Small businesses may also need several types of insurance to protect their assets. General liability insurance protects several common risks, including non-employee bodily injury, property damage and advertising injuries such as slander or libel. It also helps cover attorneys fees and other legal expenses arising from a lawsuit or other covered incident. Almost all small businesses need at least some form of general liability coverage. It is often one of the first policies a small business will purchase. Some industries may even be required to carry this type of insurance. In addition, some companies can get a discount by buying a package policy called a Business Owner’s Policy (BOP). It is a single policy that covers general liability and property insurance.
Few things are riskier than launching and running a business. Shielding your company from financial disaster preserves the fruits of all that labor and helps you sleep better at night. General liability insurance Denver protects your small business against legal costs resulting from lawsuits involving property damage or bodily injury to third parties. It covers costs like attorney fees and settlements up to the policy limits. You can often boost your limits with an add-on called excess liability, which kicks in when the boundary of the primary policy is reached. A licensed broker agent can help you choose the right limit for your needs. Most small businesses should also consider a Business Owners Policy or BOP. A combined commercial insurance policy typically includes general liability, property and business interruption. Your broker-agent can explain the coverage options in more detail. Some clients may require that you carry this type of insurance as a condition of doing business with them.
Depending on the policy, general liability may exclude certain situations or events, including non-employee bodily injuries (workers’ compensation insurance typically covers that), property damage to third parties caused by the business (for example, your employees accidentally break a client’s expensive new television), and advertising injuries such as libel, slander, and copyright infringement. It also may not include damages resulting from the use of products made or sold by the business, for which you might need a product liability policy.
Some general liability policies are part of a business owner’s policy package, but you can buy this coverage on its own as well. Also, add directors’ and officers’ liability coverage, which pays for legal costs, judgments, and settlements if your company’s leaders get sued because of a bad business decision or illegal activities. Other types of small business insurance include a crime policy for protection against theft or other forms of financial loss, commercial auto insurance for cars and trucks used during the business, and employment practices liability coverage for settlements related to wrongful terminations or other employee-related lawsuits.
The IRS allows business owners to deduct general liability insurance premiums as a cost of doing business. It helps to lower the amount your company pays in taxes, so it’s important to work with an independent insurance agent and tax advisor when filing your business taxes. For example, a customer browsing your store bumps into a shelf and breaks their big toe. Your general liability policy could help pay for their medical expenses, legal costs, judgments and settlements. In a business owner’s policy (BOP), this insurance is frequently paired with property insurance. Still, it’s also available as a stand-alone coverage through companies. In addition, it may be required by some employers or clients before you can begin working for them. The tax deduction rules are complicated, so consult a licensed accountant for guidance. They will know all of the conditions that need to be met for you to claim your business insurance premiums.