The three types of liability insurance that business owners may need

Written by Eric Ebbert CFP®, MBA

On November 14, 2020

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Owning and operating a business can be a rewarding experience, but you need to be prepared for the risks that come with it. One of the greatest risks you are vulnerable to is a liability claim, which are legal actions seeking compensation for harm or wrongdoing caused by a business’s place of operations, products or services.

You may be confident in your products and services, but accidents can happen, and you do not want to be held responsible, which could lead to compensation. This could shut down your business and even affect your personal finances. 

Fortunately, liability insurance can help you protect your business and personal assets from liability claims. However, you need to understand what the different types of liability insurance cover, so you have an idea of what your business needs.

1. General liability insurance

General liability insurance covers you against claims like bodily injury or property damage. It also helps protect you against claims of false advertising. It does not cover damage to your business’s property or an employee’s property. 

2. Professional liability insurance

Professional liability insurance covers your business against claims that your business made errors in its products or services. For example, if a client sues you because they believe you did not provide them the services promised, professional liability insurance can help keep you covered. 

3. Employer liability insurance

Employer liability insurance covers employees who are subject to workplace injuries and illnesses. Without this coverage, an employee who gets sick or injured on the job may hold you responsible for compensating their health care bills and time missed from work.

Talk to a ProVise CFP® professional about financial planning for business owners

Are you a business owner who needs help managing the financial aspects of your business so you can focus on your operations? A financial professional can help you determine which of the three types of liability insurance can be helpful for you, how much coverage you need and what types of plans you might need in the future. 

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about financial planning for business owners? Contact ProVise today to schedule a complimentary consultation.

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