Importance of Liability Insurance

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What Is Liability Insurance and Why Is It Important?

Importance of liability insurance Liability insurance is an essential coverage for small business owners. It helps protect you from claims that your business caused bodily injury and property damage. The importance of liability insurance is that every business faces claims that can come up during normal operations. Without coverage, you’d have to pay out of pocket to cover claims, which can put your business at financial risk.
One type of liability insurance that many small business owners have is general liability insurance. Also known as commercial general liability insurance or comprehensive general liability insurance, it can help protect you from claims that your business:
  • Hurt somebody
  • Damaged another person’s property
  • Caused reputational harm through slander or libel
Be aware that general liability insurance is just one type of liability coverage. Because of this, it doesn’t cover every kind of liability claim. For example, it won’t help your employees recover from a work-related injury or illness. For this kind of claim, you’d need to have another type of coverage called workers’ compensation insurance. You’ll likely need to get other types of liability insurance to give your small business comprehensive protection.

Features and Benefits of Liability Insurance

Benefits of liability insurance Protecting your business from certain claims is just one of the benefits of liability insurance. Other features and benefits include:
  • Helping pay for your business’ legal costs to defend your company in a lawsuit
  • Proving you have insurance coverage to clients and customers and letting them know you can finish a job if the unexpected happens
  • Protecting your employees and helping them recover if they get a work-related injury or illness
  • Paying for customer medical bills and medical expenses if they get hurt in your business

Examples of the Importance of Liability Insurance for Small Businesses

1. Shows Business Maturity

As a business owner, you want to show your customers that you’re responsible and trustworthy. Carrying a general liability insurance policy does just that. It shows you understand the risks your company faces during your daily business operations. We can give you a certificate of insurance to help you prove to customers that you have liability coverage.

2. Protects Your Livelihood

Liability claims can come from some of the most common business situations - and they can be expensive. Your business can be at a greater risk of liability claims if you or your employees:
  • Represent your business
  • Meet with clients face to face
  • Work on a client’s property

3. Helps You Sign a Lease

If you’re trying to rent an office space or building to operate your business, some landlords may ask you to see a certificate of liability insurance. This will show you have insurance coverage that can help protect your business from certain liability claims.

4. Easy To Extend Coverage

Sometimes contracts require you to add people to your liability policy. We make it easy to add them so they’ll have coverage.

Key Takeaways About Liability Insurance

Liability insurance is one kind of essential coverage that most small business owners need. Without it, you’d have to cover liability claims out of pocket, which can get expensive. In fact, many small businesses don’t have the financial resources to pay for liability claims. These kinds of claims are more common than you may think and they can come up during normal business operations.

Get a Liability Insurance Quote Today

We’re an experienced insurance company and we know the unique risks that your business faces. Our specialists are here to help you get the liability insurance coverage you need. Get a quote today.
The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In Arizona, New Hampshire, Washington and California, the insurance is underwritten by Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Lloyd’s Insurance Company, Hartford Underwriters Insurance Company, Maxum Casualty Insurance Company, Maxum Indemnity Company, Navigators Insurance Company, Navigators Specialty Insurance Company, Pacific Insurance Company, Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company and Twin City Fire Insurance Company. The Hartford® is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Fire Insurance Company.
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.
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