Get our app
Account Sign up Sign in

Liability risk management

Contracts and agreements can help you manage business risk.


Reduce business liability risks FAQs

  • How much business liability insurance should I purchase?

    Nearly every business should have some sort of business (sometimes called commercial) general liability insurance. However, how much liability insurance do you need? How much you need depends on your risk. Obviously, insurance is much more important to someone that owns a waterpark compared to a retail store. However, both need some type of insurance. You'll often hear about coverage in relation to "millions per incident." The lowest coverage recommended is often one million per incident, and it may cost you less than $1000 per year. If your business is in a high-risk industry, you may opt for more.

    Ready to start your business?

  • What does general business liability insurance cover?

    In general, liability insurance helps minimize your losses if your company is sued (by non-employees). Your insurance may help you cover costs such as:

    • Punitive damages
    • Settlements
    • Legal fees
    • Compensatory damages
    • Non-monetary losses
    • Property damage (others)
    • Libel and slander
    • Third-party bodily injury
    • Product liability

    Carefully go through the details of insurance options before purchasing. Look for any shortages, possible loopholes, and exclusions. Consider additional types of insurances if needed, such as commercial property insurance, professional liability, workers compensation, and employment practices liability insurance.

  • How can I lower my liability risk without spending money?

    There are many ways you can minimize risk in ways that do not require a large portion of your budget. You can reduce risk by:

    Maintaining a safe work environment

    Clearly mark dangerous areas, such as wet floors or work areas. Keep equipment in good working order. Follow all OSHA requirements. Keep all work areas clean and free of debris.

    Training employees

    You should provide safety training for new employees as well as ongoing training for current employees. Training materials should be readily available at all times for reference. You should use signage to remind your employees of safety expectations if needed.

    Provide excellent customer service

    Happy customers are less likely to take you to court over minor issues. They may also be more willing to sign a Release of Liability.

    Improve your security

    Increasing your security may cost a bit of money, and it is something that you likely should be doing anyway. Install automatic lights, security cameras, and keypad entry devices.

  • Should my customers sign a Release of Liability?

    Release of Liability forms helps certain types of businesses protect themselves. If you operate a business that provides physical activities such as rock-climbing lessons, walking tours, or sports tournaments, you certainly should have the participants sign a Liability Waiver. A Release will not protect your business from everything, such as negligence, but it may protect you from something the participant does to injure themselves, such as hurting themselves while skiing outside of the clearly marked, roped-off areas.

Ask a lawyer

Our network attorneys are here for you.
Characters remaining: 600
Rocket Lawyer Network Attorneys

Legal guides

  1. Is Your Business an Easy Target for Hackers?
    3 min read
  2. How to Prepare Your Business Legally for Cyberattacks
    4 min read
  3. How To Party Like It's 2022: Do Businesses Need Waivers for Holiday Celebrations?
    4 min read
  4. Your Business Insurance Guide to Policies and Coverage
    6 min read
  5. When To Ask for a Social Event Release of Liability
    3 min read
  6. 5 Release Forms Your Business Needs Signed
    3 min read
  7. Release of Liability Template
    2 min read
  8. Do I Need an Environmental Lawyer?
    3 min read
  9. Business Interruption Insurance Claims for COVID-19 Losses
    4 min read
  10. Check These 7 Things Before Reopening Office Buildings for Work
    4 min read
  11. Common Coronavirus Scams for Small Businesses to Avoid
    4 min read
  12. Does Business Insurance Cover Riots and Looting?
    2 min read
  13. Going Out of Business: Closing a Business Checklist
    4 min read
  14. Key Legal Documents for Rebuilding After Unrest
    6 min read
  15. Privacy in the age of social media
    3 min read
  16. Protect Your Small Business from Cyberattacks
    4 min read
  17. Questions Small Businesses Don't Know to Ask
    6 min read
  18. Small Business Saturday: Businesses Should Prepare for COVID Risks
    5 min read
  19. Are Small Business Losses From Theft Tax Deductible?
    5 min read
  20. Avoiding AI Trouble in Your Business
    4 min read
  21. Small Business Guide to Digital Privacy Laws
    4 min read

Looking for something else?