Ethics of a small business that has no Liability Insurance

If a customer has an accident in a small business retail shop and needs medical attention, this is going to have to be paid by someone.  If the accident happened because the shop owner neglected to make an area safe or neglected to remove the cause of the accident, and they had no small business liability insurance on which they could call on to pay the medical costs; would you consider this business to be an ethical business? 

Any small business today that interacts with the public must carry liability insurance.  

The ethics of not carrying any public liability insurance to cover accidents, damage and other mishaps or unforeseen events to the general public is simply being grossly irresponsible.  It is certainly not ethical to run or own a small business and not carry adequate liability insurance to cover anyone that does business with you. 

The only other option open to anyone who gets hurt or suffers loss caused by you or your employees, is to sue you personally. And if you think your small business is covered because you are a corporation or a company, you may need to think again. 

In Australia, if you are a company director, and your company is sued and you are found to have been negligent in your responsibilities as a company director, then you could be banned from being a director of your company because you have been found to be derelict in your duties to that company.

There is more than a flashy title that goes with owning your own company or corporation. You must actually be a responsible person and that means that you need to protect your company from all liability charges.  Many small business owners originally become incorporated in order to gain the tax benefits but with the benefits come increased responsibilities that some small business owners tend to neglect. 

Incorporations or Companies are classed as being ‘individuals’ in their own right. Some small business owners think that if the company gets sued, that it won’t affect them. This thinking will quickly lead the Company into trouble and any business owner or company director who thinks this way will need to do a ‘crash course’ on being a company director.  It would also be advisable in this instance to do a 101 course in ethics too. 

The ethics of a small business that has no liability insurance is definitely a business that it would be inadvisable to have any business dealings with. These companies are” flying-by-the-seat-of-their-pants” and are definitely not someone that other small business owners would be comfortable doing business with.