Why some contracts require small business insurance
Many contracts require that businesses hold some type of insurance coverage, such as professional liability insurance. For most small business owners, landing a big client is a dream – until they find out the contract requires them to have commercial insurance they don't already have. That can force them to scramble for coverage or wave goodbye to an opportunity. Requiring coverage like professional liability insurance in a contract might seem like an overreach, but it's actually a fairly common practice. Andrew Legrand, founder of cloud-based law firm Spera Law Group, says business owners often require insurance in their contracts because they do not want to carry all the liability if there is a lawsuit. "Most plaintiffs' attorneys are going to zero in on the party with the most insurance because they know that party will either sell or have the means to pay a judgment against them," Legrand says. "If someone you were working with does not have insuranc...