Small business insurance for an LLC or “limited liability company” protects your company. Claims pop up all the time when you are running a company. It is risky to not have insurance for your small business LLC. Expensive out of pocket payments could result in not covering your small business with the insurance it needs.
All of this makes it much harder to do business the way you want. Having coverage for your small business LCC can help to offset some of those costs in the event of a lawsuit. It protects you from third party claims in a very similar fashion to general liability insurance. This type of insurance for an LLC can also come in handy in protecting you from claims of libel or slander.
3 Reasons Your LLC Needs Small Business Insurance
Business insurance for an LLC helps to cover liability claims, such as bodily injury or property damage, that might be a direct result of your company, staff, or products. Professional coverage is crucial for three reasons:
You Need To Protect Your Business Assets
If your business is sued and you are found at fault you do not want to personally pay for the damages. That’s why it’s important to form an LLC in the first place. Having business insurance for an LLC keeps your company’s assets safe. Should someone hurt themselves due to your company, assets like cash, equipment, and materials could be liquidated to pay for the injuries. Protection like this ensures those costs are covered in whole or part.
Your Personal Assets Could Still Be At Risk
There is still personal vulnerability to a business owner being sued, even if they have insurance for their small business LLC. Mixing assets from your personal life and business puts them at risk for loss during a lawsuit. Should you happen to break the law–intentionally or unintentionally–your personal assets might be used to cover various legal costs.
You’ll Incur Costs If You Are Sued, Even If You Are Found Not To Be Liable
Did you make a mistake? You might get sued. Did you not make a mistake? You still might be subject to a lawsuit. Do you have business insurance for an LLC? You potentially have costs associated with a lawsuit even if you are found to have no fault.
Some potential costs associated with being sued include legal fees for attorneys. Time away from work to attend court or mediation means you could be losing money. The whole process of being sued can damage you and your company’s reputation.
Professional Liability Insurance For LLCs
Business insurance for an LLC can come in the form of professional liability insurance. This protects you in the event of you personally doing something wrong while working for your company. It also covers instances where you did not do something as you conducted business services.
Errors and omissions coverage is part of insurance for small business LLC and professional liability insurance. Sometimes it is referred to as “E&O.” It protects you and your company against claims of damage or harm that might have arisen during the course of operating your business. Errors and omissions coverage in your business insurance for an LLC can extend to covering employee mistakes. Just be sure to check your policy for “E&O.”
Set Your LLC Up For Success With Business Insurance
The creation of an LLC is the first step to protection. It covers you, your family, and your business in the event of a lawsuit. However, the next step in making sure you are as shielded as possible from potential litigation is to obtain business insurance for an LLC.
A claim against a business is not uncommon. It can lead to a lawsuit. As a business owner you could be on the hook for damages paid out. Adding the extra cost of insurance for your small business LLC might not seem like a top priority. Without it, though, you are exposing yourself and your personal assets. By the time you ask “Do I need insurance for an LLC?” it might already be too late.
The best course of action is to protect yourself, your loved ones, and your company by getting business insurance for an LLC that covers all your bases.
Conclusion
In conclusion, securing small business insurance for your LLC is essential for three key reasons: protecting your business assets, safeguarding your personal assets, and mitigating costs associated with potential lawsuits. By obtaining comprehensive coverage, such as professional liability insurance, you can set your LLC up for long-term success. Don’t wait until it’s too late; explore our insurance category to learn more about how to protect your business.
