What types of insurance should my small business have to protect against liability?

As a lawyer, there are several types of insurance that your small business should consider to protect against liability.

First, you should consider obtaining general liability insurance which typically covers claims related to bodily injury, property damage, personal and advertising injury. General liability insurance can help protect your business from a variety of risks related to consumer lawsuits, potential personal injury, and property damage claims. This type of insurance typically covers legal costs associated with a lawsuit, and can provide compensation if your business is found to be at fault.

Second, if your business offers professional services, like consulting or advising, you may want to consider professional liability insurance, also known as errors and omissions (E&O) insurance. Professional liability insurance can help protect your business from claims of negligence or mistakes made by your employees. This type of insurance is generally recommended for professionals like doctors, lawyers, accountants, and consultants.

Third, depending on your type of small business you may need additional types of coverage, including product liability insurance or cyber liability insurance. Product liability insurance is designed to protect your business in case of any damage caused by your product or service, such as injuries or illness resulting from a defective product. Cyber liability insurance is designed to protect your business from claims related to data breaches, and cyber attacks that result in the theft of customers’ information.

Finally, you may also want to consider business interruption insurance which provides compensation if your business is forced to shut down for a period of time due to unforeseen events such as natural disasters or pandemics.

It is important to note, however, that the types of insurance your small business needs may vary depending on your industry and state laws. It is recommended to consult with a licensed insurance agent or attorney to assess the specific needs of your business and identify any limitations or exclusions to coverage that may apply to your policy.

In addition to obtaining insurance, it is also important to have clear policies and procedures in place to minimize liability risks. These policies should be reviewed and updated regularly to ensure compliance with current laws and regulations. If your small business faces any legal issues, it is recommended to seek advice from a licensed attorney to better understand your legal rights and options.