The thought of facing a lawsuit at your business is a scary thing. Large businesses likely have a legal department that is practiced at handling these situations, and they may even have a budget set aside specifically for legal matters. For small businesses, it is not so easy. Small business owners may think that the threat of legal action will never happen to them. The unfortunate truth is that this is simply not true. In fact, according to one poll, 43% of small business owners have been involved with or faced the threat of a lawsuit.
The damages resulting from legal costs may be enough to put you out of business. Even if they don’t, the financial hardship will put immense stress on you and your employees. To add to that, the lawsuit may be something that harms your reputation in the eyes of the public or even the media. In order to protect yourself, your employees, and your bottom line from the myriad negative effects of a lawsuit, you must make sure you are properly prepared. This means having the right business insurance and good legal counsel available.
What Kind of Insurance Is Needed to Prepare for a Lawsuit?
It should go unsaid, but you need to make sure your business has the insurance coverage it needs before the threat of a lawsuit ever appears on the horizon. Because when it becomes too late, the consequences may just destroy everything. Here are the most common types of business insurance that can protect you against the consequences of a lawsuit.
General Liability
This policy is the first line of defense for small business owners facing a lawsuit. It is designed to cover common exposures and minimize your financial risks, such as the costs of undergoing a lawsuit. If an employee slips and falls or a customer accuses your business of false advertising, your general liability will protect you against these claims. It will also help with any legal fees, court costs, or settlement costs that may result from a lawsuit.
Specialized Coverage
Depending on your industry, your business may need more specialized insurance protection. Your independent insurance agent can help you to discern the unique risks of your business and your industry, then design an insurance profile that helps to cover these risks. That is why working with a local, independent insurance agent is so valuable. Because they live and work in your region or even community, they understand the issues you face every day. Don’t let your business go underinsured. Speak with your independent agent to make sure you have all the coverage you need to keep your business running even in the face of a lawsuit.