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Tips for buying small business liability insurance

Small business owners need to do everything they can to protect themselves, from legal liability. The potential costs from a lawsuit, can be extremely high and sometime are serious enough to force a small business to close down. The liability insurance market has become an extremely difficult market to navigate due to increased premiums and reduced coverage. This makes it crucial for small business owners to become highly educated about all aspects of business liability insurance. Here are some tips for buying small business liability insurance-

  • Join an associated-There are many different trade associations and other business groups that will provide discounted rates, for their group member. Even if you join for no other reasons then to receive discounted business liability insurance rates, the money you save can be substantial. One of the reasons that you can find lower business liability insurance rates, this way is that the insurance company will extend discounted rates to groups of businesses. However, do not limit yourself to considering only trade associations in your industry, many times there are alternative trade associations, from other markets that will allow businesses to join to take advantage of lower business liability insurance rates.
  • Shop around-Just like any other business insurance policy, you should take the time and make the effort to shop around. Comparing your coverage and rates is always a good idea, and should be done on at least an annual basis. Keep in mind that the business liability coverage will vary dramatically from one insurance carrier to the next, as well as the rates. You should also determine if and how much of any legal fees would be covered, as they can be extensive if you are sued. It is crucial to make sure that you review all of the policy details, so that you know exactly what is included and excluded in any particular policy.
  • Find out what the settlements are in your industry-The amount of liability settlement will vary dramatically, from industry to industry. In order to determine who much coverage your small business needs, it is a good idea to look at what is typical in your industry. This way you can get an idea of what you could be liable for. The best way to do this is to review any recent legal actions or settlements that have been given in your industry. You should also talk to other small business owners in your field, and ask about their level of coverage. Then when you have the information, from your industry research and from talking to other small business owners, you can then figure out the average in legal costs and settlements. This will in turn help to determine how much coverage you should purchase.
  • Bundle up-One of the best ways to save on your business liability insurance is to bundle this policy with other insurance policies that you need, for your small business. While this is not always possible, if you can, it can save you a considerable amount of money. This will depend heavily on what type of insurance brokers are available to you, and what type of small business that you have.
  • Find a broker who specializes-Business liability insurance is a specialized field. Most small business owners recommend using a broker who is familiar with your business and industry. Because each small business will have its own unique needs and risks, consulting with a broker who specializes in this type of insurance, is recommended. In addition, by working with a specialized broker, you are much more likely to get the best rates and available coverage.
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