By Nicole Fallon
General liability insurance is an important aspect of running a business. Having this policy protects you from many of the common risks associated with business ownership, such as personal injury and property damage. But if you don't take the time to carefully review and learn about your specific coverage terms, you may end up learning the hard way that it's called "general" liability for a reason.
Insurance experts discussed some costly mistakes that small business owners frequently make concerning their general liability insurance, and what you can do to make sure your business is fully protected.
Thinking you don't need insurance
One of the worst assumptions a business owner can make is that he or she doesn't need any insurance coverage. While you may not have a lot of room in your budget, the price you'll pay for a lawsuit if something goes wrong is far greater than any monthly premium for basic liability insurance.[Small Business Insurance: Where to Start]
"By not properly assessing their risks, small business owners may conclude that they do not need insurance," said Stephen Leveroni, executive vice president and general business practice leader at insurance and financial services firm The ABD Team. "Those that start in their homes may have the false assumption that their homeowners' insurance policy provides coverage [for their business]."
Leveroni also pointed out that structuring your company as a corporation, LLP or LLC does not mean you don't need a general liability policy.
"While [the structures of] these entities do help, they are not substitutes for liability insurance," he told Business News Daily.
Read more from Fox Business