As a business owner it is important to have insurance coverage for every situation.
If a client is displeased with something you have done and decides to sue, you need protection that general liability insurance just doesn’t cover. The best way to protect your company is with a professional liability insurance policy.
The article below from www.lookingfit.com discusses the importance of having professional liability insurance as a business owner. While this article uses the beauty industry for an example, the underlying message – that professional liability insurance is a necessary part of business – resonates with all industries.
Risk Management: The Importance of Liability Insurance
Most tanning salon owners would agree that securing insurance is one of the basic costs of doing business. As responsible business owners, they have budgeted for the appropriate coverage’s as a precautionary measure in the event of a loss— especially a catastrophic loss. However, there are a few optimistic souls who think of business insurance as an option. These risk takers appear perfectly content to operate their salons with little or no coverage in place. Unfortunately, most financial experts agree that this is a very dangerous practice, as those who gamble and lose usually pay a much higher price in the long run. The bottom line is, while none of us ever expects to get sued, we’ve all got to accept that even the most adept operator may face litigation for any number of reasons. While there are a wide variety of insurance coverage’s available for protecting yourself and your business, one of the most essential is liability. Liability is an especially important issue for those in the tanning industry, whose business is providing customers a service which may pose some risk of injury to them. Liability risks come in many more forms than might be expected. In addition to liability arising specifically from the use of tanning equipment, salon owners also may be held accountable for a variety of other kinds of business liabilities, such as a customer slipping and falling.
Liability Insurance
Liability can be defined broadly as the responsibility society confers on businesses and individuals to compensate those injured by their activities. Liabilities can arise from any number of business relationships and transactions, including those with customers, suppliers, partners and landlords. Liabilities also can stem from the maintenance of salon premises and even from competing with other businesses. Some sources of liability are unique to the tanning industry, while others are not; however, salon owners must be aware of these potential loss exposures when setting up and operating their businesses.
Professional versus Business Liability
There are two basic types of liability: business liability and professional liability. Business liability protects you against bodily injury lawsuits—for example, a lawsuit claiming that a customer or visitor was injured while on your premises (such as those injuries caused by trips and falls). Business liability also provides protection against property damage claims; personal injury lawsuits involving libel or slander; claims arising from the physical eviction of a person while on your premises and/or claims of false arrest; and claims arising from false advertising. The second type of coverage is professional liability. Unlike business liability, professional liability only covers your professional services. That is to say, professional liability might protect you against claims made by customers who suffer an injury due to overexposure, etc. But beware: manicurists and beauty salon owners sometimes make the mistake that their professional liability insurance also will cover a tanning bed claim—it won’t. If something happens and you are uninsured, your personal assets could be at risk, including your car and home.
The Importance of Professional Liability
Professional liability protects you against accidents or negligent acts that might arise out of your professional services. In view of skyrocketing court settlements, it probably comes as no surprise that a legal liability limit of $1 million no longer can be considered excessive, even for the smallest salon. The good news is, the cost difference between $300,000 versus $1 million in liability coverage usually is quite affordable. To determine just how much liability coverage is adequate for your situation, ask your insurance specialist what kinds of awards (in dollar amounts) have been made in your state in the past few years, and under what circumstances. If you are on a tight budget, you should carefully evaluate the amount you can afford to lose (if any) and make sure your coverage protects you to at least that point.
Professional liability insurance can protect your business – and all stakeholders – from those planning to press liability charges. After all, the business owner is not the only person affected by situations like this.
We care about our clients. We are proud to offer professional liability insurance policies that protect our business clients. If you are looking for professional liability insurance coverage or have any questions about your current policy, call us or request your free professional liability quote for dedicated assistance without obligation.
