As a small business owner in Hawaiʻi, you’re already familiar with many of the associated risks, from general liabilities including bodily injury and property damage to more specific liabilities such as the risk of cybercrime. These liabilities can not only cost your money, but also damage your reputation, increase turnover rates, and more.
To help you be better prepared, we’ve broken down the top 5 liability risks facing small business owners in Hawaiʻi. Having flexible business insurance is your first line of defense, but this requires a thorough understanding of the available insurance options and how each one can impact your business based on your risk levels.
Let’s discuss the risks so that you and your team have a better idea of the insurance solutions that make sense in your situation.
1. General Liability Risks
General liability risks refer to any situation involving people, including customers, using your business’s assets or properties. These are the most common risks facing all small businesses in Hawaiʻi, especially during the busy tourist season. Regardless of whether you run a retail store, restaurant, or an office building, general liability coverage is a must-have policy.
For example, a customer may get hurt slipping in your store. General liability coverage makes sure you don’t have to pay costly damages and legal fees. It’s a proactive way to give yourself a safety net in cases involving accidents and injuries related to your business.
2. Product Liability Risks
Defective products can hurt your customers or damage their property. Some small businesses may even face fatal liabilities, depending on the type of product or service they offer. Assessing your business’s product liability risk is key to properly insuring yourself against potential legal claims.
Customers who were hurt by your products may sue your business for medical expenses, damages, lost income, disabilities, and more. Product liability insurance pays these claims so your business doesn’t shoulder the legal expenses associated with litigation.
While most businesses don’t want to consider the possibility, product recalls can happen, and can become quite costly with notifications, returns and replacements, legal fees, and other costs. Insurance can protect your business from paying for the fallout from product failures while protecting your reputation by avoiding lawsuits.
3. Professional Liability Risks
Professional liabilities typically apply to businesses with consulting services. If your business offers accounting, legal advice, consultancy, financial planning, or other professional services, you may have a considerable professional liability risk.
This means that customers can potentially sue your business for mistakes, false advertising, or for failing to meet their expectations. Armed with professional liability insurance, your business can protect itself against these claims by covering your legal and settlement fees.
Don’t let a legal battle over bad advice destroy your reputation. Let an insurer cover your costs so you can focus on running your business.
4. Cyber Liability Risks
Today, even small businesses are at risk for cybercrimes, such as phishing and data breaches. In fact, small businesses typically have fewer resources available to secure their assets, which can make them even greater targets for cybercriminals.
Cyber liability insurance plays a significant role in protecting your business assets from modern threats. If your business accepts payment information, you have a legal responsibility to protect your customers’ payment data. Even manufacturers and other non-consumer-facing businesses store asset data, employee identification and tax forms, and other important documents on their digital servers.
No matter what type of business you operate, cyber liability insurance can help you protect your reputation, employees, and customers from data breaches.
5. Employment Practices Liability Risks
EPL risks may arise if your employees have a dispute with your practices. This can involve claims of wrongful termination, harassment, discrimination, and more, leading to considerable risks to your finances and reputation. Even a successful defense against an employee’s claim can result in costly legal fees and a damaged public reputation.
Employment practices liability coverage can help you resolve disputes with employees without resorting to costly litigation. Your insurer will have your back with the negotiation and settlement costs while helping you address any lingering legal issues.
Contact Atlas Insurance to Protect Your Small Business From Liability
In Hawaiʻi, small business owners are faced with many liability risks, including general, professional, product, employment, and cyber liabilities. It’s important for every owner to understand these risks and carry adequate protection against them.
Although this brief guide was designed to help you begin the process of examining your business’s risk profile, we also understand that this can be difficult to do alone. At Atlas Insurance, our team of local agents will help you examine your needs based on your unique risk profile and customize an insurance solution specifically for your needs.
We have helped local businesses in Hawaiʻi for over 100 years by protecting them from costly liability risks with comprehensive insurance solutions.
Contact Atlas today to learn how our insurance coverage can improve your business’s situation by preventing liabilities before they become costly damages to your assets, workers, properties, or reputation.