Small business owners need to buy liability insurance. There are are two types: general and professional. General liability is a necessity. It covers medical expenses, property damage, and legal fees. In addition, it covers false advertising and personal liability (e.g., libel) claims. Whether you need professional liability insurance depends on the type of business. This insurance (also called Errors and Omissions) covers negligence and misrepresentation, and would be appropriate for professions such as financial planning or therapy. Neither of these policy types would cover commercial property, commercial auto, worker’s compensation, or cyber security. When shopping for insurance, ask other business owners for recommendations and consider the deductible. Reputable insurance companies include The Hartford and State Farm, among others.
- General liability insurance covers medical expenses, property damage, and legal fees.
- Professional liability Insurance – sometimes called Errors and Omissions – covers issues of negligence or misrepresentation.
- Separate policies are needed for commercial auto insurance, worker’s comp, and cyber security.
“If you’re operating a small business, you’re interacting at some level with a customer and this means protecting yourself with insurance.”