Many small businesses operate without liability insurance to cut down on operating costs, but in today's business climate in which frivolous lawsuits are brought against companies on a daily basis, operating without any liability coverage is a highly volatile practice.
Often, the cost of defending a claim without insurance can push a small business into extreme debt or bankruptcy.
Small business liability insurance can end up saving a company from a financial disaster in the long term and there are ways business owners can reduce their rates.
Aside from implementing a sound quality control or risk management program, there are several proactive steps companies can take to keep small business insurance coverage costs at bay, including:

Shop around: Business liability insurance coverages range by company; read up on what is covered and what is not.
Review policy plans from several insurers and compare rates.

Consider a Business Owner's Policy (BOP): Rather than purchasing separate types of insurance from various companies, consider purchasing a package of policies.
When receiving an insurance quote on a BOP, be sure to understand what is included in the coverage.
BOPs don't typically include all types of insurance.
For instance, Professional Liability insurance, also known as Errors and Omissions insurance, which protects organizations against claims of professional negligence and errors or omissions in professional work, is usually not included in a BOP.

Enlist a specialist broker: If the small business operates in a niche, it will often require specialized insurance to safeguard against unique risks.
Insurance brokers will know what coverages are necessary for the business and know where to go for the best rates.

Research industry settlements: To better understand what small business insurance coverage might be needed, look at the other businesses within the same industry.
Research recent legal actions and settlements from businesses that are operating in the same field.
Talk to peers about their level of coverage.
Using this information, small business owners can determine average legal and settlement costs to better gauge the amount coverage necessary for their business.

While the cost of safeguarding a business and its owner with liability insurance can be costly, a little due diligence can help in finding the best coverage for the best rate.
Small business liability insurance will not only protect a business and its owner from costly litigations, it will also provide a solid foundation for success.
Business owners should invest the time in researching insurance coverages and investigate their own liability insurance needs.
This can be done by simply talking with peers, industry associations or insurance representatives.
Having adequate insurance coverage can be one of the most important steps a business owner takes in ensuring the company's survival.