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If Your Business Is Sued Tomorrow, Are You Protected?

When you first started working with the public, you probably heard this: “the customer is always right.” In the mind of the customer, this is 100 percent true. In doing business with you, they believe they have (or should have) the upper hand, and in many ways they do. If they do not like your product, they won’t buy it. If they think your staff is incompetent, they’ll make it loud and clear. If a customer thinks you’ve made a great wrong, they’ll even take you to court for it. [General business insurance](https://coverhound.com/business-insurance) will cover your legal defense and damages if your business acumen is contested in court. Don’t think a customer would sue your business? Here are some statistics that will change your mind.





**The High Cost of Not Having Business Insurance**
Here’s a shocking statistic: over [100 million](https://www.rocketlawyer.com/article/business-lawsuits-chances-of-getting-sued-ps.rl) lawsuits are filed in U.S. state courts. Every. Year. According to a study produced by the [Court Statistics Project](http://www.courtstatistics.org/~/media/microsites/files/csp/data%20pdf/csph_online2.ashx) in 2013, the average cost of a business liability suit started at $54,000! Yes, you read that correctly.

Take a look over your business’s budget. If you were sued, could you cover the $54,000 price tag of a lawsuit? Remember, that’s only the average, it can cost a lot more than that. It takes between [one and five](http://smallbusiness.chron.com/average-time-reach-profitability-start-up-company-2318.html) years before small businesses begin to generate a profit; in those first few years of business, they are generally just breaking even. You most likely do not have a spare $50,000 somewhere in your budget, but you most likely do have the budget to afford general business insurance.

**The Affordable Cost of Having Business Insurance**
General business insurance, also commonly referred to as general liability insurance, is a business insurance plan that offers financial protection in the event that your business is sued. It covers the costs of legal fees and (if you should lose) the damages awarded to the plaintiff. If after using your product or perusing your sales floor a customer falls and sustains bodily injury or somehow suffers property damage, they have the right to sue.

After you have been served with papers, it’s time to call your insurance representative and [file a claim](https://www.sba.gov/blogs/general-business-liability-insurance-how-it-works-and-what-coverage-right-you) immediately. You will need to explain in full detail the cause of the lawsuit and the issues raised in said lawsuit, along with names, dates and witnesses. After you pay the deductible, your claim will be processed and given to you to help you pay for council. It is important that you remain in regular contact with your insurance rep and your lawyer, and to be as transparent as you can with your staff. Whatever you do, do NOT communicate with the customer, as this can put your case in jeopardy. Have copies made of all [court transcripts](http://www.businessnewsdaily.com/8724-small-business-lawsuit-tips.html) and meetings between you and your lawyer, as your insurance representative may need these documents to grant your claim quickly in regards to damages, should you (hopefully not) lose your case.

General business insurance covers your assets when a disgruntled customer wants to get their paws on the business you have worked so hard to build. Don’t lose your business because you didn’t get coverage. Get a free business insurance [quote](https://coverhound.com/business-insurance) with CoverHound today.

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