Owning a business can be a risky way to earn a living as you may be responsible for investing wisely, crafting effective strategies and otherwise protecting your enterprise. An essential part of this protection will be the commercial liability insurance policy that you have in place for your enterprise.
What Happens If You Do Not Have Liability Insurance For Your Business?
Unfortunately, there are people that assume that liability insurance for their business will simply be too expensive for them to afford. However, the results of not having this type of insurance can be financially devastating. If a person is injured while they are visiting your property or other damages result from your business's operations, you may face the full cost of these damages. For small and medium businesses, this can be enough to force them to file bankruptcy and close. When your enterprise is protected by a liability policy, much of the costs of these damages will be covered by the insurance company. Considering that you can not predict the actions of the people that will be entering your business's doors, this type of policy can prove to be one of the most important types of protection that you have.
How Will The Price Of Your Policy Be Determined?
When you are evaluating the various liability policies that you can choose for your business, you will want to be aware that insurance companies can have very different formulas and methods for evaluating the risks of insuring particular businesses. For example, some insurance companies may review the credit or professional history of the owner in addition to the number of employees and activities of the business. Additionally, these companies may also review the claim history for the enterprise and lawsuits or other legal verdicts. The differences in risk calculations can make it an effective use of your time to obtain quotes from a variety of insurance companies to ensure you are maximizing your coverage while limiting the amount you will have to pay.
Can Your Liability Policy Be Voided?
Unfortunately, there can be instances where the insurance coverage may be voided. Most often, this will be the result of the purchaser of the insurance policy being deceitful. Some business owners may attempt to answer the questions from the insurance company in a way that excludes so of the more serious risks for the enterprise, such as employees using dangerous machinery. This is often done in an attempt to keep the policy premiums low, but it can be very costly as the insurance will be legally and contractually able to void a policy if the business was deceptive when purchasing it.