Do you need small business insurance with a release from liability?

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

An award-winning small business attorney in New York City, Nina is a sought-after professional speaker and Entrepreneur Magazine online contributor. She is the go-to counsel for knowledge economy and creative companies, delivering legal services and educational resources that save them time, money, and aggravation.

Posted on April 11, 2015 in Business Essentials

Q.: I wanted to start an automotive maintenance course to teach people how to change a flat tire, do their own oil change, etc. However, the downfall here is I am concerned that I could be held liable for any mishaps. Do I actually need to have business liability insurance? I know it is probably a good idea to have it, but do I actually need to have it in order to start this business?

If I do need this, I am having trouble finding someone who will cover an automotive educational course. Is it possible if people sign a release from liability I will be protected if any mishaps should happen? Do I need to carry business liability insurance for an automotive maintenance course or can I have people sign a release from liability disclaimer?

A.: With few exceptions, there is no requirement in the law that you must have small business insurance to cover your business activities.  On the other hand, for most businesses, you would be foolhardy to go into business without it.  There is no way to prevent people from bringing a lawsuit against you . . . at best, you can only prevent them from succeeding on their claim.

Having people sign a release from liability, liability disclaimers, or waivers are not always iron-clad.  In addition, under some states’ laws, you cannot ask someone else to waive your liability.  So that you don’t get caught short in either of those two scenarios, it’s strongly advisable to have small business insurance in place to cover those kinds of claims.

Another benefit of the small business insurance is that some policies will also cover the defense costs . . . which could otherwise drain your operating cash.

Here are more law questions about small business insurance.


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