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It is absolutely essential, in today’s litigious society, that small businesses purchase liability insurance. Despite the expenses, a single lawsuit can cause serious problems for a business and can even force it to go under.
Before purchasing liability insurance, you first want to make sure that your business has the protection of a legal business entity, whether through the formation of an LLC or a C-corp. Each have advantages and disadvantages: LLC’s are more flexible and easier to set up, while C-corps tend to be more rigid, but offer the possibility of going public and a greater degree of permanence. In either case, C-corps and LLC’s are necessary for legal protection from personal liability, should the fault fall upon the business.
Liability insurance for small businesses can be purchased in four forms. General liability insurance is the most common, and it provides protection from injury liability, slander and infringement on intellectual property. Professional liability insurance is essential for doctors, lawyers, engineers, and can exist in the form of malpractice or errors and omissions (E&O) insurance. The third type of coverage is product liability, which is necessary for manufacturers who risk doing injury by faulty products. The fourth, and the newest form of liability insurance, is called employment practices liability insurance (EPLI). EPLI protects against sexual harassment, wrongful termination and discrimination.
Liability insurance can be purchased from a number of insurers. One of the best place to compare liability insurance quotes is Netquote.com, an online market for all kinds of insurance ranging from personal health and auto insurance to business liability. Luckily, liability insurance can be deducted from taxes as a business expense.
If you have a number of insurances that your business is using, you may want to consider purchasing umbrella insurance. Umbrella insurance allows you to consolidate multiple insurance coverages into a single quote that is typically a lower premium than you would pay for all of the insurances individually.
