Those who take the leap to open a small business do so for a variety of reasons. Two of the most common reasons is so they can be their own boss and to make a profit.
To increase their profits, small business owners may try to cut costs wherever they can. One of the most important things that business owners must never do is skimp on business insurance.
As we head into the year 2020, these words have never rung truer. Claims of sexual harassment, discrimination, and negligence are widespread.
Now is the time to get serious about business insurance and learn the importance of why you and your business must be fully protected against the costs of expensive litigation.
Protection From Discrimination and Harassment Lawsuits
Harassment and discrimination are words that small business owners never want to hear. When employees or customers sue small business owners it can cause more than monetary damage. The emotional aspect of litigation can also take its toll. Without business insurance lawsuits and settlements can cost hundreds of thousands of dollars and most small businesses never recover.
There are many forms of harassment in the workplace including verbal, physical and sexual harassment, which all can lead to a hostile work environment. According to the U.S. Equal Employment Opportunity Commission website, employers are liable if their supervisors are accused of harassing other employees.
Small business owners can also face litigation if an employee files a discrimination suit. Types of workplace discrimination include, but are not limited to, equal pay, pregnancy, religion or age. Customers can also file discrimination lawsuits if they feel they were treated unfairly by a small business owner.
By purchasing Employment Practices Liability Insurance (EPLI), the fees for defense attorneys and the cost of settlements, if any, are covered by the insurance policy up to the limits of the policy.
Protection From Negligence Lawsuits
Lawsuits that cry negligence also run rampant. Employees and customers can sue a business owner if they become hurt while on the premises.
When small business owners purchase General Liability Insurance, injuries on the property are covered. This type of insurance also covers personal advertising injury if a lawsuit is generated due to false advertising or slander.
Even if lawsuit claims are unsubstantiated and there isn’t any settlement, business owners will have to pay for attorney fees out of their own pockets if they don’t have proper business insurance with different types of coverage.
Protection From Company Vehicle Accidents
Many small businesses utilize work vehicles for their business. These include delivery vans and vehicles that are used to haul equipment to job sites.
If an accident occurs with a company vehicle, the business owner is liable for damages if the accident is the fault of the employee. Without Commercial Auto Insurance, a small business owner will be responsible for paying repair damages to vehicles and medical costs.
According to the U.S. Chamber Institute For Legal Reform website, small businesses spend over 5 billion dollars per year in litigation costs. Also, according to a national survey, one out of three owners of a small business has either been threatened or actually been involved in a lawsuit where they were being sued.
It just doesn’t make sense for small business owners to not purchase insurance. Just one lawsuit, whether factual or not, can destroy a small business forever. Lawsuits hurt any type of business large or small, but while large corporations can usually recover, the small business cannot.
Does your company have small business insurance?