Does Your Business Need Commercial Liability Insurance?

Commercial liability insurance is a requirement for many contractors. But did you know that small business freelancers who may not consider themselves "contractors" may also need coverage? Having commercial liability insurance coverage will protect you from unexpected losses and unforeseen events.

Commercial liability insurance is also for many professional that do not fall under the typical contractor label. Freelancers such as consultants in design and engineering give opinions to clients who then act on their advice. If a client will be acting on your advice and making decisions based on your opinion, you could be liable if anything goes wrong later on.

Some other professions that fall under a freelance umbrella are management consultants, project managers and program managers. As an independent contractor neither worker's compensation nor employers liability will give you protection against liability claims. One serious claim could cost you your business.

How much coverage do you need?

Contractor liability base coverage of two millions dollars is generally recommended as a good starting point. Even with that amount of coverage, a reasonably priced policy can be found. Usually a down payment is required and the remaining payments are spread out over nine to ten months, so there's no reason not to have the proper coverage.

When choosing an insurance company, make sure it is financially stable. Insurance companies have ratings that run from A plus to B minus. Be sure to choose a company with a high rating.

You can purchase coverage that will protect you from liability for accidents, personal injury, property damage and even defective work done by a sub contractor or employee.

General contractor insurance also provides protection against claims for property damage and bodily injury. Additionally, it provides an attorney for any legal action that may arise.

Just imagine what would happen if one of your subcontractors called you to tell you he just "accidentally" stuck his ladder through a $5,000 plate glass window. Wouldn't it be nice to know you're fully covered for accidents such as that? Hey, accidents like that happen all the time, and the dollars can add up quickly. Why take chances when you don't have to?

When shopping for a policy, try to get at least three different quotes. You may be surprised at just how much each quote will differ in price. Also be sure to ask your agent or broker exactly what is covered and what is not covered, before you sign onto any policy.

Commercial liability insurance gives contractors and other freelance professionals protection and peace of mind. And you may just find that you'll get far more jobs when your potential customers know you're covered.