Understanding a company’s risks is crucial to protecting the bottom line. For businesses in Las Vegas, those risks could include incurring damage from a natural disaster, professional malpractice and exposure to lawsuits stemming from a defective product. For each of these issues, there is an insurance policy that could help the stem associated costs. However, some companies may make the mistake of overlooking the need for a product liability policy.
As the Insurance Information Institute points out, defective or dangerous products lawsuits can be quite expensive. In 2013, the highest median cost of a product liability claim came from the industrial and construction industries and totaled $2,541,000. Further, 71 percent of such claims in 2012 and 2013 cost at least $1 million if not more.
Those numbers can be devastating, particularly for small businesses. Having a comprehensive insurance policy in place can protect a company from suffering a major loss. However, not every business may need it. The U.S. Small Business Administration points out that how much insurance, if any, an organization should purchase depends on the type of product it either manufactures, distributes, retails or wholesales. For example, a clothing retailer may not need as much coverage as a company that makes children’s toys.
Many providers can cater insurance programs to fit the needs of a business. A policy can be tailored to the types of products a business offers and address the potential risks involved. While it is imperative that companies take the right measures to ensure the safety of their products to protect the consumer, these entities can also protect themselves by putting an effective insurance policy in place.