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How to Obtain Business Liability Insurance in Colorado


When it comes to your small business, it’s important to know what measures you can take to protect your business, your employees, and your customers. You have invested time, money, and other resources into your growing business and it’s important that if anything goes wrong, you have the appropriate insurance to financially cover any damages that occur. This is exactly what liability insurance was created for. To provide your small business with financial protection in the case of a claim or lawsuit. 

According to the Colorado Department of Regulatory Agencies (DORA), 

“Business liability insurance in Colorado protects the owner and business against liability resulting from non-performance of any of the products sold. Also known as Casualty insurance, it insures against injury or damage caused by the activities of the business.” 

For example, if a client suffers damages through actions or services of the owner or an employee of your business,  liability insurance will protect the owner’s personal assets, the business, and pay for costs of defense against the claim. According to DORA,  it provides a customer or client who has suffered damages to be adequately compensated, If you are considering this type of insurance, there are many factors to keep in mind, ncluding potential risks and liabilities, legal requirements, and the different types of liability insurance available. In order to make an informed decision about selecting an insurance provider that can protect your business, it’s important to understand these factors in detail. 

Consider this your comprehensive guide on obtaining business liability insurance in Colorado, offering valuable insights and practical steps for entrepreneurs and business owners. 

Potential Risks and Liabilities Your Small Business Faces 

Your small business in Colorado deserves to be protected from unforeseen events, legal disputes, and compliance. Because some things simply can’t be predicted, there are different types of insurance that can save your business time and money. Some common risks that businesses face today include employee errors, damage to assets, and security and regulatory risks. Some of these can be resolved fairly quickly while others can be a strain on your business causing downtime and lost profit. 

When considering types of insurance for your business, it’s important to know Colorado’s requirements. If you have employees working for you,  your small business must have worker’s compensation coverage that provides prompt, partial wage replacement and covers medical expenses for workers that become injured while working. Unemployment insurance is also mandatory if you have employees. Depending on your type of business, we also recommend commercial auto insurance and professional liability insurance to protect your business in the case of a lawsuit or accident. General liability insurance in  Colorado is also a wise option. This includes property damage and bodily injury claims. 

Business liability insurance is another name for general liability and includes a variety of types of coverage. If a customer is injured at your business, the customer’s property is damaged, or advertising injuries occur, like libel and copyright infringement, business liability insurance has you covered. It’s important to know that small business owners may be required to have this type of insurance to fulfill requirements for a lease, loan, or contract, making it critical insurance to maintain for your Colorado business. 

Professional and Product Liability Insurance 

General liability insurance extends even further to include both professional and product liability insurance. The professional option covers disputes that may be made over the quality of a professional service that has been provided, which is appropriate for most small Colorado businesses that provide a service. This type of liability also includes media liability insurance, which protects businesses from libel, slander, or other advertising injuries.

Property liability insurance is regarding a business that manufactures, distributes, or sells products. If these products happen to cause harm to people or property, this insurance can help cover the cost of lawsuits, claims, and other financial losses related to products. An example is defective products or mislabeled products that can cause injury or harm. Both of these types of insurance can safeguard your business and provide you with coverage in the case of a customer’s complaint against a product or service you offer. 

Due to Colorado’s rapid transition into the technology landscape, more and more businesses are beginning at home. There is less and less need to invest in a physical office space or deliver products yourself since most consumer goods and services can be managed from the comfort of one’s home. It’s important to know that even home-based small businesses in Colorado should consider liability insurance. According to the Insurance Information Institute

“Depending on the nature of your home-based business, you’ll need insurance to protect the value of your business property from loss due to theft, fire or other insured perils. You’ll also need liability protection to cover costs if someone is injured as a result of visiting your business or using your product or service. Your homeowners insurance may provide some protection for your business, but it may not be sufficient.” 

Asses Your Business Insurance Needs 

Every Colorado small business should not be treated the same. The size of your business and the industry you are in should be reflected in the liability insurance policies you pay for. In order to determine what insurance is appropriate for you, we recommend conducting a thorough risk assessment. This assessment will help guide you in determining the best coverage limits based on potential liabilities.

To begin, apply the most widely used risk assessment tool called SWO (Strengths, Weaknesses, Opportunities, and Threats). This can help you analyze both your internal and external environments, identify factors that could impact you financially, develop strategies of success, and minimize your threats. A risk matrix can also be used to take a more quantitative approach to measuring risks and prioritizing steps of action. A risk matrix is especially helpful for small businesses operating in complex industries, such as construction and finance. 

When selecting a liability insurance provider for your business and coverage limits, consider all of the potential liabilities that your Colorado small business faces. This could be related to customers, products, services, employees, and finances. Taking the time in advance to project possible risks can help you select the right correct coverage for you, your business, and your customers. 

Choosing the Right Liability Insurance Provider for Your Small Business 

You have worked hard to build your business, and you deserve to have the tools, resources, and expert insight to guide you through the insurance process. We recommend working with a reputable agency that has the experience, customer service, and notable reputation to help you with your business needs. Think of this relationship as long-term. Do you want to go into a partnership that doesn’t support you or is able to identify your needs as your business grows? Or do you want to rely on an agency that knows your industry well, prioritizes your success, and helps you stay prepared for risks that lie ahead?

If you said the latter, then you’re off to a great start. Consider how long a liability insurance provider has been in business in Colorado, what the state of their financial situation is, and request more info about their claim-to-settlement ratio. This will give you deeper insight into their success with getting you the money you deserve as well as previous customer satisfaction. 

Navigating the Insurance Application Process

When preparing to obtain business liability insurance for your small business in Colorado, it is important to first consider how much coverage you need. Here are a few important factors to look at: 

  • Consider your business’s size, the number of employees you have, cost of business operations, and the industry you are in
  • Before signing a lease or a contract for your business, make sure your coverage meets the requested policy limits
  • Think about if your business work with products or services that could potentially negatively impact your consumers or employees and increase your risk of lawsuits 

In addition, if your business faces high risks, such as financial or environmental, remember that you can extend your general liability insurance coverage with commercial umbrella insurance. This can help cover unforeseen costly lawsuits and claims. 

Prior to your application process, you should compare policies from different providers to see which ones you align with are a cost-effective solution to your insurance needs. When you

ready to start applying, it is imperative that you accurately include your business assets and your estimated annual revenue to get the right insurance option for you and your Colorado business. Before signing anything, review your policy in detail with the insurance provider and with your business team to ensure that you are adequately covered. 

Review and Update your Policy When Necessary 

As your small business grows with new successes, you may also face new risks. We know it can be easy to automatically send a check to your insurance company every month without thinking twice but in order to stay industry compliant and maintain a cost-effective business strategy, it’s important to regularly review your policy. Perhaps the insurance agency made changes to your business’s liability insurance policy since the previous year or there are discounts available to your business that you may have missed. You may also want to consider raising your deductible to save money or raising the amount of coverage for liability if your products or services have changed. To stay-up-to-date with these things, review your liability insurance policy periodically to get the best rate from your insurance agency.

Contact Moody Insurance Today

Working with a trusted insurance agency is a necessary step to ensure your business is covered in the event that you are found legally responsible for an accident that causes injuries to another person or damage to their belongings. Moody Insurance can help you gain a greater understanding of the claims process and protect your small business against lawsuits. When a claim is made, a reputable insurance agency from our experienced team can help you negotiate a settlement that is fair for your circumstances. 
If you’re looking to protect your small Colorado business in the Rocky Mountains with liability insurance, contact our team for personalized assistance and a free consultation or call us at (303) 824-6600.

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Moody Insurance is here to help provide you with solutions to your personal, business or employee benefits insurance questions. Please fill out the form or call us at 303.824.6600.

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