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Why Does Your Small Business Need Commercial Liability Insurance?

Posted by Jonathan Krems | Aug 04, 2022 | 0 Comments

In this week's Freedom Friday blog and email newsletter, I'm going to talk about a subject that came up with a recent prospective client.  This is something that may not seem to be law-related, but it really is, especially if you're in the construction business.  Before I get into this, I get a lot of referrals and inquiries, and I've been keeping track of what industries are contacting me.  The number one industry that contacts me is the cannabis industry, which is just buzzing in Oklahoma.  The number two industry is construction, and if you're in the construction industry, then this topic is especially for you and your small business.  In today's Freedom Friday blog and email newsletter, I'm answering the question, “Why does your small business need commercial liability insurance?”

So, I was contacted by a prospective client who is in the construction industry, and he is a home builder.  He had been sued and needed to know what his options were.  Of course, I do handle litigation for many of my clients, but I wanted to look at his lawsuit first because I want to make sure he got the best representation possible.  In Oklahoma, we have a website called, and unless your lawsuit is in Comanche County, everything is scanned, and you can pull up just about any lawsuit and read the Petition.  In some states the Petition is also called a “complaint,” but in Oklahoma, the plaintiff files a petition which starts the lawsuit.   I pulled up his petition and started reading it.  The first cause of action was breach of contract.  However, the second cause of action was negligence.  You might be asking, “How can a home builder be sued for negligence?  I thought negligence was just for car wrecks and bad doctors?”  Actually, there are all sorts of negligence claims that can be made for all sorts of damages.  Unfortunately, if you're in the construction industry, you can be sued for negligence, in addition to breach of contract.

As soon as I saw the negligence claim, I asked the prospective client whether his business had commercial general liability insurance, and he said he did.  Then I asked him if he had contacted them.  He said he had not.  I told him that he needed to contact his insurance carrier right away, because they can retain counsel on his behalf and assist him in defending this lawsuit.  Of course, that's what he did, they hired him a great defense firm that is handling these claims like a pro, and all he's paying for that are insurance premiums (instead of attorney fees).  This is the #1 reason why your small business needs to have commercial general liability insurance.  Especially if you have any kind of brick-and-mortar operation or office, even if its not retail, if someone has an accident while they're on your premises, even a minor slip and fall, you and your small business can be held liable.  However, if you have a commercial general liability insurance policy which covers the space, they will have a duty to provide coverage and even hire you a lawyer to defend your small business if it gets sued for negligence.  That's why every small business needs commercial liability insurance.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

About the Author

Jonathan Krems

Jonathan is the Founder and Managing Attorney of Liberty Legal Solutions, LLC, a law firm dedicated to building, protecting, and defending the business and personal interests of our clients in Oklahoma.  Jonathan's primary practice areas are business law, contracts and agreements, business liti...


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