Small Business, Big Liabilities
Your business may be small, but that doesn’t mean your liabilities are. Liabilities are the potential damages that your company can be held financially responsible for if someone is monetarily or physically injured by your products, your services or while on your premises.
The first step toward determining your potential liabilities is not to look at your annual sales or profit—because your liabilities are not limited by how much you can afford to be liable for. Instead, you must start by looking at your risks.
Where are you exposed?
Your risks are the areas that leave you exposed to potential liabilities. This will vary based on your business. For example, if you have a storefront and have customers come in, then you have risks that include slips and falls. If you work from home, you still may have risks when a package delivery service person brings you a business package—because they could fall on your front steps.
If you have a product you send out to customers—even if you don’t manufacture it—you could be sued if the item causes physical damage to someone. If you provide a service, you could be sued if you damage your client’s property. If you have a small shoe repair company, you could be sued if you perform a faulty repair that results in an injury or if you damage one of your clients’ high-end shoes.
An insurance agent who specializes in business insurance can help you identify the specific risks faced by those in your industry. He or she can also help you choose the right lines of liability coverage—from general liability to professional, malpractice to errors and omissions.
Measuring potential liabilities
As you can see, risks are almost endless no matter the size of your business. Once you have an idea of those that your business faces, you should try to imagine the potential expense of the damages each one could bring. This will consist of medical expenses, lost wages, court costs, damages, and so on.
We can help you anticipate the financial damages you can encounter by looking at statistics and real-world examples from your industry. When you are ready to make sure all your Michigan Business insurance needs are covered, give us a call 800-220-5582.