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Cost Of Product Liability Insurance For Small Business
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Manufacturers, Do You Understand Your Products Liability Risks?
In 1944, Gladys Escola, a waitress at a restaurant in Fresno, California, collected Coca-Cola glass bottles. As she was restocking the shelves, a defective bottle exploded in her hand, creating a five-inch gash that cut her nerves, blood vessels and muscles. She sued the Coca-Cola Bottling Company and the court ruled in her favor, meaning Coca-Cola was liable for the damages.
Became very important in the creation of US product liability law. Arguably, this is the reason why most companies today require product liability insurance. Let's find out what it is and why your business needs it.
Product liability insurance is insurance that protects your business against lawsuits for personal injury or property damage related to a product you manufacture, distribute, or repair. In other words, product liability insurance ensures that you won't be on the hook for expensive lawsuits if your product injures someone. Some injuries or damages are covered by your general liability insurance policy, but not all.
If you make or sell products, your business may be liable for the costs of a product liability lawsuit if your product harms a customer, even if the customer uses the product improperly. Product liability insurance protects you from legal and financial consequences. It provides third-party coverage, which means that the payment for damages goes to those who were hurt or injured, not to your business. (In this case, the injured party is the third party and your company is the first party.)
The Complete Small Business Insurance Guide
Not every business needs product liability insurance—only companies that manufacture, distribute, or repair physical products do. However, it is important to note that "product" can be interpreted broadly. If your business sells food and someone gets sick after eating your food, you'll need product liability insurance.
Product liability insurance can be included in a business owner's policy (BOP), a comprehensive insurance package that provides various types of business insurance, including general liability insurance, commercial property insurance, and workers' compensation. Exact PB coverage depends on your insurance company and industry. If your business is in the manufacturing, distribution, retail, food, construction, beauty, or repair industries, your BOP probably has product liability insurance (though it's worth double-checking).
Depending on your business, your general liability insurance, which provides broad coverage for personal injury and property claims, may also provide you with product liability coverage. Many are engaged in this policy. If you have general liability insurance, find out what is covered and whether you need to buy an additional policy.
As with any other type of insurance, the best way to get product liability insurance for your business—BOP or self-made—is to ask for quotes from several different insurance providers to compare.
Public Liability Insurance
If you sell physical products, you need product liability insurance, even if your business is online. However, if you sell digital products such as software or web design, you may need errors and omissions or professional indemnity insurance.
Some general liability insurance policies include product liability coverage, but this is not a guarantee and may not adequately cover your needs.
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General Liability Insurance Quote
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Starting your own business can be exciting and fulfilling, but it can also expose you to many risks. This is where business insurance comes in. While there is no coverage that makes running a business completely risk-free, business insurance can help you prepare for the unexpected, including lawsuits, employee injuries, and car accidents.
Small business insurance can cost anywhere from $600 to $1,200 per month, depending on the size of your business, number of employees, and insurance needs. Your business likely needs several different types of business insurance, and researching the average cost of small business insurance can help you find the best policy at the best price for your business's unique needs. Here are some common types of business insurance you may need and their average cost.
General liability insurance covers claims for bodily injury, property damage and reputation (including claims against your company for libel, defamation or copyright infringement). Think of it as the business version of homeowners insurance. Although general liability insurance is generally not required by law, special licenses and contracts are often required.
Product Liability Insurance: Coverage & Quotes
If your business provides professional services or consulting, professional liability insurance, also called errors and omissions (E&O) insurance, protects you against claims related to the results of your work, including errors, omissions, and negligence. For example, a realtor who failed to mention mold in the basement could be liable for damages. On average, professional liability insurance costs between $56 and $117 per month. Different states have different requirements for what industries and occupations require professional indemnity insurance — some states require real estate agents to carry E&O insurance and others don't, for example — so check with an insurance broker in your area to find out what you need.
Workers' compensation insurance provides benefits and lost wages if one of your employees is injured on the job. Many states (including California, Illinois, and New York) require small business owners to obtain workers' compensation insurance coverage when they hire their first employee.
Since most workers' compensation insurance costs are based on wages, your premiums increase as you hire more workers. The average cost of workers' compensation insurance is between $70 and $111 per employee per month.
Commercial vehicle insurance covers accidents for your company vehicles. This is required (in all states except New Hampshire and Virginia) if your business has any vehicles, such as a van, construction vehicle, or van.
General Liability Insurance Cost
A business owner's policy combines general liability insurance and commercial property insurance into a single plan. However, features depend on your needs and your ISP's recommendations. In addition to the protection of a general liability insurance policy, a business owner's policy provides coverage for accidents, emergencies, theft and vandalism to your property.
The business insurance costs described above are average. You can pay premiums above or below this limit. There are many factors that affect how much you pay for business insurance. Here are some of the most important changes:
As you expand your business, the more it grows, the more you can expect to pay for business insurance coverage. Every sale you make, employee you hire, and asset you buy (including vehicles and property) is another opportunity for something to go wrong. Your insurance costs will reflect this.
If the insurance company sees that your business has made many claims in the past, they may view you as a high-risk customer and raise your monthly rate. To put your business in this situation, implement and follow safety measures to reduce the risk of accidents.
The Ultimate Commercial Property Insurance Guide
The location of your business also affects how much you pay for business insurance coverage. Some states may require you to purchase certain types of insurance that are optional in other states. For example, legal practices in Oregon are required to carry professional liability insurance. You may also see higher costs for business insurance in high-risk areas (such as cities for commercial auto insurance) or in places where normal business operations are typically more expensive.
Different types of businesses face different types of risks. An optometrist's private practice may need professional indemnity insurance to protect against negligence claims, and a florist may need commercial vehicle insurance to cover accidents involving their truck. Businesses in industries with a high risk of injury (such as electrical contracting, logging, and fishing) are likely to pay more for workers' compensation insurance.
After learning about the different types of insurance and their average cost, it's time to start shopping. Here are a few steps you should take before signing up for a plan:
The cost of small business insurance depends on your business needs and risk. You can start with $65 a month for general liability insurance and then consider what other types of coverage you need.
Stallholders And Market Stall Insurance
Start with general liability insurance, workers' compensation insurance (if you have employees), and commercial auto insurance (if you have vehicles). Then think about what else your business needs based on your risk.
Yes, business insurance is an important part of normal business operations. The good news is that your business insurance costs are likely to be lowest when you're just starting out, especially if you don't have any employees.
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