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3 reasons why your small business needs legal insurance

As a small business owner, you usually have more tasks to do than there is time in the day to accomplish them. You meet with vendors, customers, and employees to make sure that every-thing is running efficiently in all parts of your business. However, with humans involved, there are bound to be accidents and incidents in or around your business.

Legal insurance is one tool to keep your business operations running smoothly in spite of such unexpected events.

3 Reasons Why Your Small Business Operations Should Consider Legal Insurance

Here are three common events that are good reasons to consider a legal insurance plan.

Theft and Burglary

According to a study by the Insurance Journal, claims by small businesses are expected to increase over the next 10 years. Additionally, the study concluded that the most expensive claims involve Burglary and Theft, which is the most common (at 20%) and most costly (at $50,000).

As a business owner, you naturally want to make sure that you are sufficiently covered for legal expenses arising from theft, in addition to losses from the theft itself. When you meet with insurance providers, it’s vital that you ask them the right questions.

If you are unsure of what questions to ask, download this guide to Legal Insurance 101. The guide covers questions such as whether the attorneys in your insurance net-work are credible. By purchasing legal insurance that covers theft, burglary, or identify theft, you are insulated from having to pay legal fees associated with these occurrences.

Workers Compensation Claims

Another kind of legal insurance that you need as a business owner is workers compensation. It is defined as an insurance which provides employees with lost wages and medical aid in case they are injured while in the workplace, or on the job. Not only is having workers compensation mandatory if you have employees, but there is a high probability that one of your workers will suffer an injury.

A recent study by Concentra found that there is a 50% chance that you, as a business owner, will experience a workers compensation claim made by a fellow employee. Therefore, it is important that you are sufficiently covered in case of an emergency.

Additionally, it ‘s important to understand the various types workers compensation benefits that your employees will be eligible for in case of an accident.

One of the benefits that employees may be eligible for are Permanent Total. An example where this would apply would be if a cook is unable to do the job because his hands were cut off while operating a piece of restaurant equipment.

Additionally, your employees’ families may also be eligible for workers compensation. An example would be if your employee was killed while making a delivery or driving to your business to start their shift. In this scenario, death benefits would be applied to the employees’ significant other and their respective family members. The employer would also be required to pay for funeral arrangements for the employee who was killed.

While the worker’s compensation covers this, there is a good chance you’ll need legal representation to help your business navigate a serious workers compensation claim that might exceed the coverage. Or your employee may legal need help in successfully filing their claim.

Added Protection from Customer Lawsuits

All business revolves around relationships and reputation, especially with your customers. They are the reason why your business exists. But relationships go awry and you need to protect against potential lawsuits filed by customers.

Depending on your business, there are several types of insurance policies to protect you from customers’ claims. One of the most common is Product Liability. For example, if your customer were to get sick from food poisoning, such as consuming expired products, you’re liable.

There is also Third-Property Property Damage. Let’s say your waiter accidentally spills a dish of spaghetti on a customer’s white shirt and suit. You’re also liable since the destruction of customer property was involved. A study from Insureon reports that liability claims against small businesses can cost over $100,000.

Whether you’re operating a brand new startup, or you're a long-time business owner, it’s good to periodically review all your business insurance policies. Although it is impossible to predict the future, it’s important to protect yourself, your employees, and your customers from all types of situations.

Consider legal insurance as an added layer of protection without the expense of an attorney on retainer. It’s also a way to keep your business operations running smoothly in spite of the unexpected.

[Editors note: This article is educational and doesn’t constitute legal advice. See your attorney if you need specific legal advice!]

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