How Much Liability Insurance Do You Need?

Becky Beuerman

bbeuerman@orrinsurance.net

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We have all heard or read the stories about an individual suing a big name brand company for an injury caused by the product they purchased not performing up to standards, the coffee lid not on tight enough causing a burn, the food causing food poisoning. The list can go on and on. We in Canada like to think that suing over the way a product performs, or doesn’t perform, is more of a problem for our neighbours to the South. That could be true because maybe those cases get more airplay. But don’t be fooled, the need to protect your business and property from a liability claim is very much in the forefront for us North of the border.

Whether you own a business or a home, liability insurance prevents you from having to pay large sums out of pocket if you are held legally responsible for something detrimental that happens to a another person. On the commercial side, liability insurance is a must. So anyone from the Tupperware lady down the street to the large big box store needs to have commercial liability insurance. The old saying, “A dollar doesn’t go as far as it used to” could be compared to a million dollars of liability insurance doesn’t go as far as it used to. Regardless of your business the potential to be sued increases every year as lawyers get more aggressive. More and more business are looking at $5 million limits. Some municipalities require $5 million as a minimum to work for them. The increase in premium will vary, but the benefit of having the extra coverage will be worth it, should you ever need to access the policy.

The same need is there for the general public, but this would fall under personal liability insurance. This type of insurance protects you and members of your household against claims that result from injuries and damage to other people or their property. Personal liability is packaged with your insurance you purchase for your house, condo, apartment etc. The limits for personal liability vary from insurance companies as well, usually starting at one million dollars. The recommendation as a broker would be to have a minimum $2 million of coverage. Many clients are now looking at personal umbrella policies to increase their liability limits to $5 million on both homes and autos they own. . This may seem like a high limit but once again, that ‘small issue’ could turn into a ‘big issue’ and a million dollars won’t go as far as you would like. Please call our offices and talk to your broker about the increase of your insurance, whether it is for your business or your personal policy. You don’t want your misfortune to end up as the next news headline…