3 Ways General Liability Insurance Can Help an IT Business Grow
We get it: buying General Liability Insurance is maybe not your first choice for spending your hard-earned revenue dollars. You’d rather spend that money on, say, a new gadget or a lot of coffee or maybe you’d like to reinvest it in your business (although given the potential productivity books, coffee may also fall into the “reinvestment” category).
Good news: buying a Commercial General Liability Insurance policy actually can be considered an investment that will help your business grow. Read on for details.
1: General Liability Insurance Can Help You Move into a “Real” Office
A lot of the IT professionals we work with (about three-quarters, in fact) work from home when they first apply for coverage. Home-based offices are a great way to save money and keep your business lean in the early days. But when you start hiring employees and needing somewhere to meet clients, a “real” office starts to look better and better.
If you’ve started scoping offices and reading commercial leases, you’ve probably noticed that they require you to carry Commercial General Liability Insurance. Why? Because this policy offers coverage if a third party gets injured on your business premises and decides to sue.
If you don’t have a General Liability policy in place, the injured person will likely sue your landlord, who almost certainly has such coverage. No landlord in their right mind is going to take on that risk by themselves, so they require tenants to have the coverage. This is just basic business sense: it’s the same reason you’d likely require any contractors or subcontractors you work with to carry their own General Liability Insurance. (More about that in General Liability Basics for Technology Contractors.)
2: General Liability Insurance Can Help Attract Bigger Clients
One of the benefits of being in IT is that everybody needs your help. Individuals, small businesses, and giant corporations all use technology and most of them don’t understand how it works. That’s great for your bottom line.
What’s even better for your bottom line is when you land a client that has the means to pay you very well for your services. These tend to be larger, more established, and corporate clients. Scoring a contract with just one or two of them can make a material difference to your revenue and can let you focus more on work and less on tracking down lots of new clients.
The catch? Bigger clients want you to have General Liability Insurance. This is because they have big corporate policies they have to comply with. And these policies exist for the same reason your landlord’s policy does: to spread out potential liability. When a lawsuit happens, the injured party often sues “everyone in the room” in an effort to recover the greatest possible amount of damages. That typically means that a technology contractor could be named as well as the corporation that hired him or her – regardless of actual involvement with the incident.
In a situation like that, your General Liability coverage can pay for an attorney to clear your name from wrongdoing while your client’s policy handles the rest of the costs.
3: General Liability Insurance Can Protect Your Finances
The first two reasons had to do with how your Commercial General Liability policy can make you more attractive to others. But in reality, its biggest benefit is the protection it offers you.
Small businesses typically don’t have a giant financial cushion, meaning that even a relatively small unexpected expense can spell big trouble. For example, an ambulance ride and trip to the ER can easily rack up six thousand dollars in medical bills – or much more.
Having a General Liability policy means that you enjoy the peace of mind that comes with knowing that your finances are protected in the event of an unexpected event like this. And that means you can go ahead and make your next big investment in coffee and gadgets. Phew.