Protecting Your Business from Liability: A Guide

It’s better safe than sorry. This is especially true with businesses, where being sorry could end up meaning paying out millions in damages and going bankrupt as a result. That is why you need to protect yourself from liability by following this guide:

The Major Three of Liability Insurance

Every business needs at least three types of insurance to operate. General liability insurance, professional liability insurance, and, if you hire even one other employee, worker’s compensation insurance. Everything else will depend. If you work from home providing a digital service, you won’t likely need contents insurance, for example. The major three types, however, are necessary to even run a business in most states.

General Liability Insurance – Covers any damage suffered by a member of the public by your company. This covers physical damage, pain and suffering, and even non-physical damage like copyright infringement.

Professional Liability Insurance – Covers your work professionally in case of a lawsuit. An electrician that improperly wired the electricals in a building, for example, would need professional liability insurance to cover damages sought out in a lawsuit.

Worker’s Compensation Insurance – If you employ others, then you need worker’s compensation. This type of insurance works on a no-fault basis, meaning your employee can get all the compensation they need to recover after an injury without you paying for it directly.

How to Ensure the Insurance You Have Covers You


The best way to ensure that the insurance options you are looking at are right for your business is to use insurance options designed for your business. A construction company, contractor, electrician, plumber, and everyone in-between that works on a construction site to turn a plot of land into a home or office can benefit well from construction insurance.


These specialist insurance options cover all of your bases, but because you are bulking them together, you can save on your construction insurance cost. It’s the same premise as combining your auto and home insurance to enjoy a discount, only in this case it is insurance to protect you legally and financially from lawsuits.

How to Ensure You Rarely Use Your Insurance

Insurance is your last resort protection. It is best if you never need to use it, though chances are someone is going to do something silly and still end up getting a payout at least once during your career.


That doesn’t mean you shouldn’t try to improve your business practices so that the risk of a lawsuit is slim. Start first with hiring the right people. The ones who don’t cut corners, who adhere to the law, and who care about their work. In construction, especially you don’t want people who will half-heartedly do a job that could result in an accident in the future.

Ensure that your business is always up to date with any qualifications, certifications, and other necessary documentation and training you need. If your subcontractors suddenly need to take a new course to prove health and safety, then don’t use them until they can show you the documents. It’s all about covering yourself and providing the best service to your customers.  

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