Medical Malpractice

If you are opening a new business, buying commercial insurance for it is an absolute must in most situations. Without the insurance, you are risking everything. In our litigious society, that is a very aggressive position to take.

Business insurance comes in many forms and is far more extensive and complex than personal insurance. There is insurance for health, disability, liability, and basically any "...ility" you can think of! In this article, we are going to focus on insurance covering the risk of lawsuits.

There are a large number of law schools across the country. These law schools send new lawyers into the world each and every year. In California, for instance, there are over 100,000 active attorneys in the state. These attorneys usually have bills to pay, including horrendous student loans. They are looking for work and that means bringing and defending lawsuits. Regardless of the part of the country you are in, businesses tend to be the targets of the lawsuits.

To counter this, business owners have the ability to protect themselves from lawsuits by forming a business entity. The choice boils down to a corporation or limited liability company for the most part. Each of these entities will provide a shield against personal liability, to wit, the personal assets of the owners will not be at risk.

There is a problem, however, that most business owners do not really think through. What about the assets in the business? You might own machinery, real estate, patents, trademarks, software, business secrets and so on in the business. All of these things are at risk and the business entity does not provide any protection for them.

Liability insurance is the answer to the above scenario. There is general comprehensive insurance policies for most businesses, but some are specialized to the industry in question. This is particularly true for professionals. Medical, accounting and legal professionals, for instance, all have malpractice insurance policies. In truth, they are the same type of policy, just with a different name.

A good general liability policy will provide you with two things. First, it will usually provide you with legal representation to fight the lawsuit. Second, it will pay any resulting lawsuit up to a certain amount. Obviously, you want to make sure you understand that amount!

Carrying insurance on your business just makes sense. The insurance is usually not particularly expensive, and it can save you a ton of heart ache if things go bad.