In America, small companies are the majority of the businesses here. Most of these businesses are under 50 people and started by either one person or a partnership of two or three people. For those that deal with products in their businesses, small business product liability insurance is a must to best protect themselves in case of a customer complaint or lawsuit filed against the company. This article describes who needs it, what the cost is and what coverage should be included to protect you.
Instructions
1. There are lots of small businesses that need product liability insurance to properly protect themselves. Those that manufacture, sell, distribute or are involved in any part that is associated with the product can be held accountable when a lawsuit is filed against the product. If small businesses do not have product liability insurance, a lawsuit can put an end to your business. So, it is important for business owners that operate factories, stores or are involved in any of the process associated with a product to purchase appropriate product liability insurance.
2. The costs are different for different types of businesses and products insured and the volume of your sales. Before going into business, you should ask about the product liability insurance costs that are associated with your product. You might not be able to pay the insurance costs for the product that you want to sell. Some cost significantly more to insure than others. For example, performance-oriented auto parts are far more expensive to insure than pencils and pens. Cost is associated with risks of the products. High sales will increase the cost of insurance, as well. Low-risk products typically cost between $3,000 and $4,000 annually. Many times, an insurance company might not be willing to cover you, but it is important to talk to as many business insurance agents as you can to get information and give them your company.
3. Sometimes the small business product liability insurance is included in the commercial general liability business insurance. You will have to look carefully or ask your insurance agent about the coverage. To best protect your business, you have to know exactly what is covered and what is not covered. You need to see what kinds of damages are covered by the plan. The amount that is covered is important, as well. The claims filed against you can cost significant amounts of money, so your coverage needs to be an appropriate amount for the type of product you are involved in. Many suggest the minimum amount to buy is $1 million per case.
4. It is important to get a second opinion on business product liability insurance from an experienced individual. The Small Business Administration is a good source that provides lots of help for small business owners.
