Liability insurance is needed

You decided to start a business, program, league or event. Have you thought through the whole process? Aside from filing your necessary paperwork to form your business have you thought about liability insurance? You might be asking yourself, why do I need liability insurance?

It’s a fair question and unfortunately in our litigious society it’s important to make sure that you’re protecting your business in the event of damages or injury. I doubt that most people, especially a small business, have money set aside to pay for large legal fees should they arise. It’s a good idea to make sure you have the coverage you need to protect your interest.

You may be thinking that insurance is a difficult proposition to undertake, or that the cost associated to get insurance is beyond your reach. Honestly it’s not. If you’re just starting out you can do some different things to help you get off the ground. A few things I’ve done are to purchase my own insurance, which if you’re operating as a business you’ll need. Or, if you haven’t quite decided to go down the business route is to create an agreement with another entity and work as a 1099 employee. Either way, do some research and figure out what your needs are, and what you can afford.

If you ever want to rent space in a facility one of the first things they’ll require from you is a certificate of liability from you or your organization.  This is a simple process, and will require you contact your broker to provide the certificate of liability naming the rental facility on your insurance.  Below are some common policy limits for general liability, though each broker may have variances to these limits.  It’s recommended that you research various policies to suit your needs.

Common Policy Limits

Each Occurrence $1,000,000
General Aggregate $3,000,000
Products/Completed Operations Aggregate $2,000,000
Personal/Advertising Injury $1,000,000
Damage to Premises of Others $   300,000
Premises Medical Payments  (spectators) $       5,000
Participant Legal Liability $1,000,00

It’s important to have some sort of liability coverage, but it’s not a fool proof plan.  It is important that organizations take necessary steps to mitigate potential risk as needed.  It would be wise to develop a risk management plan.  A risk management plan allows you the opportunity to think through how the organization will respond to issues as they arise.  Having a plan in place ahead of time will help you think through all the potential risks, and hopefully avoid unnecessary ones. 

Regardless of a well throughout and executed plan injuries and accidents will occur.  The important thing is to be ready for them and can respond accordingly.  Do you know how to respond in a medical emergency?  Does the facility have an Automatic Electronic Defibrillator (AED) with staff to properly use it?  These are important questions to answer when walking into any facility, especially if you’re putting on an event, or league. Make sure to take the time to put everything in order