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馃敶 Business Liability Insurance Explained | What Is Business Liability Insurance? - YouTube
Channel: Lena Petrova, CPA - Finance, Accounting & Tax
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Hi everyone! Welcome back! If you're new here my聽
name is Lena, I'm a Certified Public Accountant.聽聽
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Several weeks ago I started a new video聽
series here on my channel that focuses聽聽
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on helping small business owners with the key聽
concepts as well as various tips and tricks to聽聽
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help you run your business if you would like聽
to get a quick refresher or maybe learn more聽聽
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about business working capital what exactly is聽
profit margin what is self-employment tax etc聽聽
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those videos are already uploaded and available聽
here on my channel i will provide links in the聽聽
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description below as you start your business聽
you're laser focused on your products or services聽聽
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on selecting your business structure setting up聽
your business accounts and making that first sale聽聽
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however i can tell you one thing we're not looking聽
forward to do and that is shopping for and setting聽聽
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up our business liability insurance this just聽
seems daunting and not too exciting to say the聽聽
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least but that can also be one of the biggest聽
mistakes you'll ever make as a business owner聽聽
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a lot of unexpected things can happen and聽
we all know that they do happen when we run聽聽
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a small business as your business grows having聽
insurance will help you pay for various expenses聽聽
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such as property damage or even liability claims聽
as with any insurance having this to fall back聽聽
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on will prevent you from having to make high out聽
of pocket payments i think business liability聽聽
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insurance will help you handle an event that聽
could completely destroy your entire business聽聽
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so with that said in this video i will share聽
the basics that will help you get started聽聽
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with your own research and i will share the聽
different types of business liability insurance聽聽
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that there are and help you select which one will聽
suit you best now there are businesses that have聽聽
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been operating for a while and they may not have聽
insurance at all while that may be luck if you聽聽
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don't have insurance your business is liable聽
for all damages and legal fees out of pocket聽聽
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if anything out of the ordinary happens to your聽
business including getting sued for example it聽聽
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could completely put you out of business and聽
if you don't have business insurance you will聽聽
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be in a really bad place so while it may be true聽
that some can get away without it generally it is聽聽
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not recommended just because it's not wise to聽
take a chance when it comes to your business聽聽
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so first before you even start shopping for a聽
business liability insurance you need to have聽聽
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a good understanding of how your business operates聽
meaning what are the main processes the number of聽聽
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employees you have now and whether you think that聽
the number will actually increase in the future聽聽
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do you or will you have equipment and determine聽
if there is any physical property these are going聽聽
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to be the main drivers the main factors that will聽
help you decide what type of liability insurance聽聽
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which we will discuss next will fit you best聽
generally there are different types of insurance聽聽
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coverage available for small businesses the most聽
common types can be split into four categories聽聽
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workers compensation employee dishonesty聽
commercial access liability and business聽聽
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owners policy so let's focus on each one starting聽
with workers compensation this liability insurance聽聽
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is recommended for small business employers and聽
will protect both you and your employees if they聽聽
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become hurt or sick as a result of their direct聽
work related responsibilities what this insurance聽聽
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does is provide weight replacement rehabilitation聽
costs and medical benefits some business types聽聽
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probably need this insurance more than others聽
for example if you have a landscaping company you聽聽
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really need this because there is a higher risk聽
involved since your employees handle equipment聽聽
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if you have an online clothing boutique then maybe聽
this is something that you can completely skip聽聽
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and save your money so with that said don't cut聽
corners but do try to see if there is a high risk聽聽
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involving your employees duties and what potential聽
consequences may be now let's talk about employee聽聽
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dishonesty liability insurance or sometimes it聽
is called fidelity bond crime coverage or crime聽聽
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fidelity this would provide protection if your聽
employee commits fraud the definition of fraud聽聽
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or fraudulent activity or criminal activity聽
is really vast and depends on your industry聽聽
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generally it would include things like credit card聽
fraud unauthorized fund transfers computer fraud聽聽
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or counterfeit fraud as someone who works in audit聽
before i can tell you that depending on the size聽聽
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of your company you should have controls over your聽
employees access to certain types of assets such聽聽
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as cash if you accept cash as a form of payment聽
from your clients or maybe bank account access聽聽
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system access my clients were fortune 100 and聽
fortune 500 companies and if you are interested聽聽
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i can create a video to share best practices with聽
you regarding controls over assets and finances聽聽
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let me know in the comment section below聽
that is something that you're interested in聽聽
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the third type of business liability聽
insurance i want to talk to you about聽聽
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is commercial access insurance this is usually聽
considered to be an added type of insurance聽聽
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protection to your business owners policy which聽
we'll discuss next what this does is provide聽聽
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limits that exceed the underlying liability policy聽
it does not broaden the stated coverage per your聽聽
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business owner's policy but it will provide聽
higher limits on top of the original policy聽聽
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for example if your business is located let's say聽
downtown and you're concerned that there may be聽聽
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public disturbances that would impact your聽
business you should get access insurance liability聽聽
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that would essentially add that extra protection聽
now moving on the fourth type of insurance is聽聽
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business owners policy which i believe should聽
be considered by all who own a business.聽聽
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In fact, most businesses are required to have聽
this but if yours isn't technically required i聽聽
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would still highly recommended your business聽
owner's policy generally is an umbrella term聽聽
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that would include property and general liability聽
coverages one of its greatest features is that you聽聽
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would be able to customize your specific coverage聽
based on what your business actually needs聽聽
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so for example if you have a physical store and聽
let's say one of your customers slips and falls聽聽
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you will need your general liability coverage聽
to handle that situation for you if for example聽聽
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someone breaks a window and steals something聽
at your physical location you will need to have聽聽
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property coverage insurance which is part of your聽
business owner's policy so a similar situation聽聽
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can occur if you have a consulting business for聽
example and so you don't have a physical office or聽聽
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a physical store you have a consulting business聽
and you do your business online and let's say聽聽
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your customer decides to make a claim stating聽
that they lost money due to your advice or due聽聽
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to your consulting services that you provided聽
to them so whether or not you have a physical聽聽
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location a business owner's policy is a very good聽
and helpful thing to have so i hope this video was聽聽
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helpful and provided some clarity and you learned聽
something new if you found this video helpful and聽聽
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interesting please do me a big favor and subscribe聽
to my channel it really helps my channel a lot聽聽
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give this video a thumbs up and share it with聽
those who may need this information thank you so聽聽
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much for watching and thank you for supporting聽
my channel i'll see you in my next video
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