Entrepreneurs and business owners in Ohio might benefit from understanding more about the liability insurance available for many small businesses. Depending on what assets the business owns, conducting an operation without liability insurance may be quite risky. Sole proprietorships with personal items tied to the enterprise may be at a greater risk since assets like vehicles and homes can be confiscated through civil action. Even though incorporated businesses are less exposed to this risk, their assets may still be targeted in a lawsuit.
The liability insurance that a business is required to possess typically depends on the industry they operate within. An umbrella business owner’s policy typically groups liability insurance alongside different types of coverage. General liability insurance is designed to cover negligence claims. These policies may provide coverage for product liability issues, court costs, legal expenses, property damage, medical costs and bodily injury.
Many enterprises select a Business Owner’s Policy because it’s often the most cost-effective option for smaller businesses and the coverage can be tailored to work within different industries. Employment practices liability insurance is designed to protect companies against the threat of lawsuits brought on by allegations of wrongful termination, harassment or other issues not covered under the conventional policy. Businesses involved in wholesale, distribution, retail or manufacturing are advised to invest in product liability insurance.
Entrepreneurs interested in learning more about business transactional matters might benefit from consulting with legal counsel. Lawyers may be able to help assess the business and help owners identify which types of insurance coverage are designed to protect their long-term interests. Legal counsel might also be effective in develop other strategies that can help entrepreneurs avoid encountering adverse legal action in the future.
Source: Houston Chronicle, “What Is Liability Insurance for Small Business?”, Kenny Brown, accessed on Feb. 16, 2015