Last
week, we looked at three types of insurance coverage that every business
owner should have. While buying insurance coverage may seem low on your to-do
list, making sure you and your business are protected from lawsuits is one of
the most important things you can do for your business.
After all, your business can’t grow and
succeed if you’re forced to sell it to cover lawsuit expenses! This is
especially true for smaller companies. While you may think your chances of
being sued are lower than a large corporation, the damage your small business
could sustain due to a lawsuit is all the more harmful because your business
likely doesn’t have the liquid cash reserves you’d need to pay off the costs of
being sued.
Facing
a lawsuit as a small business isn’t just stressful, but it could cost you your
entire business!
Instead, investing in appropriate insurance
coverage will give you peace of mind and let you focus on expanding your
business knowing that if something happens, you’ll be able to handle it and move
forward with confidence.
Here are two more types of insurance you
should never go without!
4. Employment Practices Liability
Insurance
A lesser-known but very important insurance
coverage for business owners is Employment Practices Liability Insurance or
EPLI. EPLI insurance protects you against lawsuits filed against your business
by your own employees under claims that your company violated their workers’
rights.
Types of lawsuits covered under these policies
include:
● Wrongful termination
● Poor management of employee benefit plans such as retirement accounts
● Sexual harassment claims
● Discrimination
● Infliction of emotional distress
● Breach of employment contract
In our increasingly litigious world, the
chance of being sued by one of your own employees is greater than ever. While
every business owner should have policies in place to reduce the likelihood of
employment issues that can lead to a lawsuit, there’s always still a risk, and
that risk is simply not worth it.
If you aren’t sure how to get EPLI coverage,
start by talking to your general liability insurance policy provider to see if
they offer it as a rider on your general liability policy. Otherwise, many
companies offer affordable stand-alone EPLI policies.
5. Professional Liability
Insurance
Last but certainly not least, professional
liability insurance is an essential safeguard for service-oriented businesses.
Also known as errors and omissions insurance, this coverage protects your
business against claims arising from errors, omissions, or negligence in your
professional services. Even the most seasoned professionals can make mistakes,
and in such cases, your clients may seek compensation.
Professional liability insurance provides
financial protection by covering legal fees for your defense and money for
settlements and damages paid to the suing party. If you need a license to do what you do –
such as doctors, lawyers, contractors, and accountants – professional liability
insurance is an absolute must.
These policies also usually include an option for
“prior works coverage” and “tail
coverage” that extend your policy coverage limits for work you did before
taking out the policy and for work you completed during the policy term even
after you’ve canceled that policy.
Protecting Your Business and Planning
for Its Future
It’s my passion to help business owners create
businesses and lives that they love, and that starts with a strong foundation
that protects you and your business.
That’s why I offer a Business
Strategy Session to make sure your Legal, Insurance, Financial, or Tax
systems are set up for success. Once you have the essential building blocks in
place, I support my clients as an extension of your team with monthly support
that helps you grow your client base, understand your cash flow, and plan for
steady, reliable growth.
If you’re ready to take the next steps toward
building and protecting your business, schedule
your free 15-minute discovery call today. I can’t wait to be part of your
team.
This
article is a service of Ganvir Law, Personal Family Lawyer™. We offer a
complete spectrum of legal services for businesses and can help you make the
wisest choices on how to deal with your business throughout life and in the
event of your death. We also offer a Business Strategy Session for an ongoing
business, which includes a review of all the legal, financial, and tax systems
you need for your business. to schedule.
The content is sourced from Personal Family Lawyer® for use by
Personal Family Lawyer® firms, a source believed to be providing accurate
information. This material was created for educational and informational
purposes only and is not intended as ERISA, tax, legal, or investment advice.
If you are seeking legal advice specific to your needs, such advice services
must be obtained on your own separate from this educational material.