A discerning small business owner may have insurance coverage for liability arising from property damage, personal injury or bodily injury, but this does not necessarily mean freedom from liability. There may be an existing small business insurance policy but oftentimes, the extent of accountability is limited by a ceiling amount agreed upon. This may depend on the nature of the business and the amount of amortization agreed upon. Therefore, if the policy owner is sued for an amount greater than the insured amount, the coverage would be limited to the ceiling amount.
Being protected should not open the doors for neglect, and each entrepreneur should still take precautions to avoid accidents and liability. A reasonable amount of caution should still be exercised, as negligence may be a reason to void an insurance contract. To reduce the risk of liability and payment and to maximize the insurance policy, it is necessary to implement the following measures:
- Quality Control – there should be strict standards and guidelines to ensure that products or services are meeting quality standards. Consistency in output would reduce the risk of complaining customers or employees.
- Proper Training – each member of the staff should have sufficient training to ensure that they are knowledgeable and capable of doing their tasks properly
- Security Measures – small business owners should take precaution by installing CCTV cameras, or hiring a security agency
- Safety tips – the insurance company may have safety tips and additional instructions to avoid liability
Small business insurance policies may be tricky to understand, and may have several clauses that would seem unfavorable. Taking extra precautionary steps, therefore, would result not only to more satisfied customer, but more savings as well.