If you own a small business — or are planning on starting one soon — it's imperative to purchase liability insurance. Regardless of the size and scope of the operation, you'll want protection in case someone gets hurt. Property damage, copyright issues, and libel or slander can also put the business's finances at risk. To purchase an adequate policy that addresses these problems, review this guide to learn about the common misconceptions regarding liability coverage.

What Are Common Myths About Liability Insurance?

1. The Business Is Too Small

The operation — no matter how small — is vulnerable to litigation. While it's true that large corporations are major targets for lawsuits because they can cover significant payouts without batting an eye, small businesses aren't necessarily shielded from them for the opposite reason. If someone were to take action against you and win, you would have to find a way to cover the settlement or verdict, even if that means paying out of pocket. 

2. Subcontractors Have Enough Protection 

liability insurance

If you work primarily with subcontractors, you may not be planning on buying liability insurance because they carry their own policies. While their coverage may apply to some portion of the projects they do, it doesn't apply directly to you. 

You need your own policy to protect the enterprise. In fact, for comprehensive coverage, you may even need to purchase an extended policy that covers subcontractors. 

3. It Doesn't Help the Bottom Line

While the business is in its infancy, you'll look for ways to reduce overhead costs to start making a profit sooner. When the bottom line is unpredictable, liability coverage probably won't seem like a priority. 

However, if you break down the costs versus the benefits of having a comprehensive policy, it should become clear precisely why you need it. For a fraction of the coverage limits, you'll get peace of mind knowing the business is protected from all kinds of third-party claims. 


When you're ready to purchase liability insurance for your business, turn to America's Favorite Insurance & Tax. This independent agency is staffed by friendly and knowledgeable agents who will help you find a policy that has everything you need. By working with all the nation's leading carriers, they're able to offer exceptional products at competitive rates. To request a free quote, complete the form on their website. Call (954) 951-1960 to talk to someone in Pompano Beach, FL, or dial (972) 662-8221 to reach someone at their Desoto, TX, office.