Is It Hard to Get Small Business Liability Insurance?

 

Small business liability insurance is protection no small business owner should be without, especially in a litigious society such as the one we're living in here in the U.S. A single injury that one of your customers or employees suffers could spell financial disaster to your business without some good small business liability insurance to help cover the cost of a liability suit.

Getting Small Business Liability Insurance

Small business liability insurance is easy to obtain and is offered by most insurers selling business insurance. There are numerous types of business liability insurance, including:

• General Liability Insurance, which protects you against financial losses resulting from lawsuits stemming from bodily injury, property damage or slander, and for costs associated with legal defense and judgements.
• Product liability Insurance, which protects you from financial losses resulting from lawsuits stemming from defective products causing property damage or bodily injury.
• Professional Liability Insurance, which protects you from financial losses resulting from lawsuits stemming from claims of malpractice, errors, omissions or negligence.

Steps to Buying Small Business Liability Insurance

There are some basic steps you can take to get your business liability insurance. Start with a clear assessment of what types of risks your business faces. What kinds of accidents or lawsuits could be damaging to your company?

Contact a well-regarded, licensed commercial agent who can recommend coverage that best matches your insurance needs. Use an independent agent with access to a number of different insurers and let them offer you at least three insurance options. Compare the different terms, rates and benefits and pick the policy that best suits your particular insurance needs. After a year, re-access your business insurance needs and upgrade as needed.

Home-based Businesses

• A small home-based business, operated out of your personal home, can be protected for a small amount of business property loss and liability claims by adding a rider to your existing homeowners policy. The amount of liability coverage you need will depend partly on whether or not you have clients or customers coming into your home to conduct business. An umbrella policy can be added to your coverage for increased liability coverage. These policies are reasonably priced and add coverage to your existing liability protection.

What Is a Lienholder?

 

While some car buyers are able to pay cash for their automobiles, many others take out a car loan in order to purchase the vehicle they want. If you borrow money for this purpose, whether from a bank, a credit union, a car dealership or even a private party, the lender will hold a legal claim on the vehicle. This claim is known as a lien.

The lender, known as a lienholder, will have a legal interest in your vehicle until such time as the loan is completely paid off. Having this legal interest in your property, your lienholder has certain rights and may require you to fulfill certain obligations. These include having the lienholder named as co-owner on your title and on your insurance documents. They may also require you to carry a certain type and amount of car insurance on your vehicle.

Your Home Mortgage is a Lien

If you are buying your house with the aid of a mortgage loan provided by a financial institution, the company that provided the purchase funds automatically became a lienholder for your home. They have a legal claim on your property and will require that you have an appropriate amount of homeowner's insurance in force. This is to protect their financial interests in the event that your home becomes damaged or destroyed by some unforeseen event.

Certain debts owed in conjunction with your home may also become liens. These may include:

• Overdue taxes
• Unpaid construction costs
• Judgements
• Unpaid and overdue association fees

In actuality any property that you own that was bought with money from a loan can have a lien put against it until the loan is paid off. If the loan payments are not made as agreed on, the lienholder may have the legal right to repossess the property that has gone into default.

What a Lienholder Requires

Getting back to your vehicle purchase with borrowed money, whatever financial institution lent you the money to buy the car is the lienholder and will require some certainty that they have financial security regarding the transaction. While the State of NC requires all drivers carry a minimum amount of liability insurance in case they cause injury or property damage while driving, your lender will likely require you carry collision coverage, in case you're in a collision accident, and comprehensive coverage, for non-collision losses such as fire, theft, vandalism, extreme weather, etc.

What Is Landlord Insurance?

 

Landlord insurance is homeowner's insurance designed to protect homes not occupied by the owner. If you own a house, apartment or condo that's used as a tenant rental, landlord insurance is what you need to protect yourself from the dwelling being the cause of your suffering financial loss from a number of risks. These risks, known a “perils” in the insurance industry, are similar to those contained in a standard homeowner's insurance policy, although the landlord policy is typically smaller in the depth and breadth of its protection.

Differences Between Homeowner's Insurance and Landlord Insurance

While it's possible to buy landlord insurance for your owner-occupied home, it wouldn't be wise since the coverage is lesser in scope and yet likely more expensive in cost. On the other hand, typical homeowner's coverage being carried on a rental property is a definite no-no, since any loss occurring on the property won't be covered and any claim will be denied.

There are three types of landlord insurance policies: DP-1, DP-2 and DP-3. Each contains dwelling protection and liability protection. They may also contain loss of use protection. Additional optional coverage is also available. Here's a brief rundown:

• DP-1 – This is the most basic and lowest-cost landlord insurance. It's a “named perils” policy, meaning that only perils specifically listed (or named) in the policy are covered. Most DP-1 policies are actual cash value (ACV) policies, which means any claims payments for covered property losses may include a calculated amount subtracted for depreciation.
• DP-2 – Also known as Dwelling Fire Form 2, DP-2 is average protection for a rental home and considered adequate for most rental properties. It is also a “named perils” policy, typically covering 18 listed perils similar to those found in the popular homeowner's HO3 policy. Unlike the DP-1 policy, the DP-2 is a Replacement Cost Policy as opposed to Actual Cash Value coverage. This means that depreciation is not factored in when a claims payment is made, thereby providing much more comprehensive coverage. Most DP-2 policies include Loss of Rents coverage, which pays you rent if your tenants are forced to move out while repairs are made to a property damaged by one of the policy's covered perils.
• DP-3 – The best rental property insurance, DP-3 is “All Risk,” meaning all perils except those specifically excluded are covered. This is Replacement Cost insurance and also includes Loss of Rents coverage.