NLIC.org

Amanda Said:

Do I need business insurance for a student window washing business?

We Answered:

Every business should have General Liability insurance. If you do something that causes somebody to think it is your fault, an insurance company insuring your business will do the following:

1. They will provide legal defence for you. Attorneys can be very expensive.

2. They will pay for any of your wrong doing covered by the policy up to the limits of the policy.

3. Give you peace of mind that if you do get sued you will not lose your financial life.

If you don't have any personal assets and some clients is willing to hire you without you having any insurance coverage, then by all mean, go without.

If you are doing window washing as a student during the summer and you DO NOT have a business using a DBA. Then I don't think I would bother with insurance as an isurance company would not issue you a policy anyway. However, if you lose customers because of NO INSURANCE then it might benefit you to go legal and get a DBA and insurance.

If you caused some property damage without any insurance, you should pay for it out of your pocket. However, it might be covered by the homeowners policy but don't count on it.

Laura Said:

How does business insurance work in a lawsuit?

We Answered:

In the event of a lawsuit the insurance company would undertake your defense and pay the associated legal fees as well as paying for legal counsel. The insurance company has complete legal control in the litigation process, they choose whether to settle or contest the issue in a court of law. In the real world it is rare that an insurance company would actually go to court. In most cases they would seek a settlement.

This of course assumes that the incident is covered by your policy. A lawsuit may contain several complaints. The insurance company is obligated to provide a defense for you if any of the claims could be covered, but the company may not be obligated to pay the damages for certain types of claims. Liability policies, for instance, typically do not provide coverage for damages which you cause intentionally.