Do I Need Liability Insurance?

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
min read
Opinions expressed by Entrepreneur contributors are their own.

Yes, you do. Any business that deals in high-risk and related activities, such as construction, should have appropriate levels of insurance in place. Otherwise, you run a serious risk of bankruptcy -- if there’s a judgment against your company -- or worse, exposure of the owners personally.

Additionally, liability insurance may well be a requirement of any job that you work on. Be sure to speak to a commercial insurance professional to make sure you have the levels -- and different kinds of business insurance -- that you will need.

Related: Top Seven Mistakes Business Owners Make Filing Insurance Claims

As to other legal factors, you’ll want to take steps to reduce your risk exposure. These include: forming a separate business entity, having a written contract for all of your jobs and complying with any health or safety regulations that are relevant to your business. Don’t overlook codes and regulations concerning sanitation and disposing of hazardous materials.

As to the business itself, you’ll want a clear understanding with your business partner about decision-making, capital contributions and why each of you might leave the business -- which you’d address in a partnership agreement. A local attorney who understands the construction industry should be able to help you with these items.

Related: Seven Steps to Get Your Business Ready For the Big One 
 

More from Entrepreneur
Our Franchise Advisors are here to help you throughout the entire process of building your franchise organization!
  1. Schedule a FREE one-on-one session with a Franchise Advisor
  2. Choose one of our programs that matches your needs, budget, and timeline
  3. Launch your new franchise organization
Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Try a risk-free trial of Entrepreneur’s BIZ PLANNING PLUS powered by LivePlan for 60 days:
  • Get step-by-step guidance for writing your plan
  • Gain inspiration from 500+ sample plans
  • Utilize business and legal templates
  • And much more

Latest on Entrepreneur