Fewer things in life are riskier than setting up your own business, why increase the risk of failure by not having adequate insurance to protect your business.
Liability insurance is designed to cover you in the event that you are pursued for compensation by a third party, where they feel that they have suffered a loss as a result of your negligence (lack of care).
In the event that you are successfully sued by a third party your liability insurance will be able to pick up the costs for the compensation that has been awarded against you and any legal costs that you have occurred as a result of defending your claim. If you do not have adequate insurance then you will be liable to pay the cost for the compensation.
There are various types of liability insurance:
- Public Liability Insurance
- Employers Liability Insurance
- Product Liability Insurance
- Professional Indemnity Insurance
Each liability insurance policy is designed to protect you from third parties, although liability insurance will not stop claims arising when they do they will be able to provide you with the financial security you need to defend the claim and also pay any damages that are awarded against you.
If someone is injured while visiting your home, they could sue you for damages. If they win and a court awards them a big settlement, you could be financially ruined. Your wages could be garnished and you could have a hard time getting back on solid ground. Property insurance safeguards against this kind of liability.
Your home insurance will also protect you against liability for accidental damage to someone else’s property. For example, if you live in an apartment building and your bathtub overflows, resulting in damage to your neighbour’s apartment, your home insurance will pay for repairs or replacement.