Major corporations need public liability insurance for a number of reasons. First, they are worth a lot, which means they could be a target for opportunistic con artists looking to capitalize on the fact that they would rather offer a settlement than take a bogus claim to court. In addition, they could have any number of interactions with customers, clients, vendors, partners, and others not employed by their business (both in their own establishments and at other locations). And if they are to blame for accidents resulting in injury or property damage they could be on the hook for quite a bit of payout. For this reason they are willing to pay the price for public liability insurance. But what about your small business – do you need this type of insurance, as well?
Like everything else you must purchase in the pursuit of your professional goals, the value of liability insurance is in the eye of the beholder. Perhaps you run a rather insular office where the worst injury that ever occurs is a paper cut. You don’t have customers, you meet clients at public places, and vendors ship items rather than visiting your offices directly. But can you say for certain that you’ll never play host to someone who is not directly employed by your business? Even if you work from home you might have to host a work relation at some point. What if that person slips on the floor, causing injury? Or suppose his car gets damaged by a falling branch in your driveway? Your business will be held liable and you will have to pay for medical bills, repairs, or possibly even a settlement in a lawsuit (not to mention the cost of legal fees and other expenses). Get the picture?
Of course, you may actually never have visitors, potentially negating the need for this type of insurance, but you almost certainly go out. And if you happen to frequent other businesses in the course of your own operations, you could also be held liable for injuries or damages that you cause. What if you’re picking up materials from a vendor and you run the palette jack into a window? Or suppose you run it into a person? What if you accidentally bump someone and he tumbles down a flight of stairs? These events may not happen frequently, but you only have to be liable once and it could be enough to sink your small business.
On the other hand, public liability insurance can be expensive, although the cost will likely be based on the size and scope of the business you run, with higher probability of accidents resulting in concurrently higher monthly payments. Plus, there are always restrictions and exclusions that apply, reducing the value of the service. For a small business with very little likelihood of facing liability issues, this added expense may seem rather unnecessary. But the truth is that it only takes one major injury or instance of property damage to make liability insurance worthwhile, and when it occurs you’ll be happy you were prepared. In the meantime, consider that you’re purchasing peace of mind.