There are all sorts of businesses out there that ponder the question do I need insurance and if so why.
Business insurance offers real protection from problems that truly do exist in todays society. Many business owners do not believe this and when thinking about business insurance feel the following. Insurance is unnecessary and they have been forced to buy it to do business with a client or perhaps the state. Other feel that the likelyhood of anything happening to them is just so slight that it is often in the back of their minds until an unfortunate circumstance happens to either them or someone they know that is close to them. As you should come to realize, it is or paramount importance to have insurance and there are several varieties. It not only buys peace of mind but also puts a financial deposit into the protection bank for the vitality of your most valuable investment – your business.
Here is a brief guide to how business insurance can work for you and what kinds of products you will need for your industry.
All entrepreneurs realize that in order to be successful, you need three things.
An idea that you believe in
So we all know why we need the first 2, Lets explore why a business needs protection. All business owners face a variety of risks that threaten their financial wellbeing, including:
Loosing valuable property due to a circumstance that leads to damage or loss
Causing a situation where someone (a third party) gets injured because of their operations conditions of their property
The risk that because of their professional services, one of their clients is hurt financially and is looking for restitution
An employee gets injured, is no longer able to work and requires their medical bills to be paid as well as lost wages. These are some of the points we will touch on with regards to business insurance.
Most small business weather retail store, restaurant, corporate offices, condo associations, doctors etc usually fit into an insurance product offered by many companies called a BOP or a Businessowners policy. A Bop usually contains the most broad form coverage in an all risk all in one form so to speak as follows
Property insurance for buildings and contents owned by the company
Liability protection, which covers your company’s legal responsibility for the harm it may cause to others. This harm is a result of things that you and your employees do or fail to do in your business operations that may cause bodily injury or property damage due to defective products, faulty installations and errors in services provided.
Business interruption insurance, which covers the loss of income resulting a claim that disrupts the operation of the business. It can also include the extra expense of operating out of a temporary location.
Other types of businesses such as contractors and consultants may want to buy just General liability which will cover them in the event that someone is injured as a result of their work on the job site or even after they have left. General Liability Insurance is the baseline of coverage for any business. It protects against claims that your business caused weather personal injury or property damage to clients or other third parties. Benefits from a general liability policy typically include payment for court costs and payments for settlements or judgments for which you’re found liable.
Further to general liability, anyone providing any kind of professional service should purchase Errors and Omissions Insurance : Also called Professional Liability. These policies will pays benefits in the event that a client alleges that your professional work including advice you may have given caused physical injury or financial loss. As with other types of small business insurance, E&O coverage pays for the cost of your legal defense as well as any actual damage.
Another coverage point that many consultants that fall into the technology class should consider cyber liability insurance: This coverage protects businesses against the costs of data breaches and related cyber incidents that expose your clients’ sensitive information.
Most businesses by law must carry Workers’ Comp Insurance protects your business from the costs associated with workplace injuries or illnesses. In the event that one of your employees becomes sick or injured on the job, your Workers’ Comp policy will pay for the costs of defending yourself against the employee’s claim as well as any damages (medical bills, medications, etc.) you’re found responsible for covering.
In Addition to these primary types of insurance, businesses should consider Commercial Umbrella Liability This type of insurance allows you expand all liability coverage limits on most primary insurance policy(s)