Part of doing business as an independent contractor is making sure that you have all of the necessary paperwork to protect your business. This is true whether you are starting a woodworking business, or an accounting firm. One of those pieces of necessary paperwork is the general liability insurance policy.
The General Liability Insurance Policy
The general liability insurance property protects your business financially if a customer or employee is injured as a result of your work or on your business premises.
For example, if a client is injured while visiting you in your workshop, he or she could sue you for damages. General liability insurance can cover the cost of your defense and pay out on the settlement if you are found liable. Without general liability insurance, you would have to pay out of pocket for your defense, and the courts could go after your business assets if you lose the case. To make matters worse, if you are a sole proprietor, the courts will also go after your personal assets.
General liability doesn’t just cover you against injuries, it can also protect you against other business issues like suits for copyright or trademark infringement, and even for data breaches on your office computer, which could leave your customers vulnerable to identity theft.
Without general liability insurance, you could end up in a world of financial hurt if something goes wrong.
Getting General Liability Insurance
Getting general liability insurance is actually fairly easy. In most cases all you need to do is get a general liability insurance quote from a reputable provider. However, if you are a member of a professional organization, such as The American Association of Woodturners or The Victorian Woodworkers Association, you can often find general liability insurance coverage directly through the organization.
How Much Coverage Do You Need
Ultimately, the amount of coverage you need depends on several factors. For example, if you routinely have clients in your workshop, you could have a higher risk of someone getting injured and would most likely need more coverage than if you operated out of a storefront that was separate from your workshop.
On the other hand, if your storefront is located in an area with a lot of ice and snow, you also have to take into account the possibility of slip and fall injuries as people enter and exit your store.
If you have a delivery truck, then you also need to consider coverage against damage to a customer’s home or property during the course of delivering the finished items, such as broken door frames or scratched floors if the items are particularly large or heavy.
Some of the general liability insurance available through professional organizations could provide exactly the coverage you need for your type of business, but those policies could also have limits on coverage that might not fit your needs.
For example, some policies might protect against injuries and damage incurred while in the workshop, but not those that occur during a routine delivery.
Just like with any other insurance product, it pays to shop around to see what types of policies are available, and which coverage is best for your individual needs. It also couldn’t hurt to talk to an actual insurance broker to determine exactly how much coverage you need.
The last thing you want is to have something happen and discover too late that you don’t have enough insurance coverage.