Q:Question I plan on opening my own business within the next year. I want to make sure I’m properly insured from day one. What exactly does business liability insurance cover?

Farmers Insurance^® agent Joel Brekken of Duluth, Minnesota, explains how business liability insurance can help you protect your operations.

A:Answer I’m glad you’re already thinking about insurance for your business. Your risk begins the moment you open the doors. And keep this in mind as you consider your options: You can start with a certain amount of coverage, then easily change your coverage as your business grows.

Liability insurance is there to help you cover costs when someone — a shopper in your store, for example — blames you for a loss or injury. Our business policies always include general liability insurance coverage, which  can help you cover your financial responsibility for a range of business-related accidents. Examples include:

• A visitor slips and falls on a wet floor at your store.
• You break a customer’s window while making a delivery.
• A metal sign falls off your building and lands on a car.  
• Your advertising says something false, violates someone’s privacy or infringes on a copyright.

Risks like these come with the territory for most companies. That’s why general liability coverage is an essential part of business insurance policies.

But your business may carry risks specific to the products or services you provide, as well. So you can add other kinds of coverage tailored to those risks. Let’s say you make waterproof bags for smartphones. A production glitch one day results in some leaky bags, and your customers’ phones are ruined. Or maybe your landscaping company accidentally damages an expensive backyard grill while installing paver stones. You can choose coverage that can help pay to repair or replace the damaged property.   

You can also add coverage for cyber liability in case you accidentally expose a customer’s personal information online. If you have employees, you may want to consider general liability insurance coverage or employee practices liability insurance (EPLI), which helps cover employment-related claims like harassment or wrongful termination.

When selecting liability insurance for your business, it’s important to identify the risks you face and understand how insurance can help cover them. As I tell my customers, it’s your livelihood, and you can choose how to protect it.

Written by

Joel Brekken

The information contained in this page is provided for general informational purposes only. The information is provided by Farmers^® and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

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