Business insurance is a way of protection against potential financial loss from natural disasters. It’s a kind of collective risk management, mostly used to offset the potential risk of an unpredictable or unforeseeable loss. While the average business owner probably does not need this type of insurance, it is useful to have in the event of an accident or disaster. Because business insurance is very similar to life insurance in many ways, understanding the key differences can help you choose the best business insurance policy for your needs.
There are three major types of business insurance policies collision, general liability, and property damage. General liability covers damages that occur on the premises. Property damage, on the other hand, covers any damage to or theft from a customer’s property. The amount of coverage that you are granted will be based on the type of business and the location of your business.
You have several options when it comes to selecting a business insurance policy. The first step is to analyze the risks that your company faces, as well as what kind of coverage you need. A comprehensive inventory list all the property that your company own or lease. Estimate the value of these assets, as well as the worth of all equipment, inventory, and machinery. Once you have these numbers, you can calculate how much coverage you will need. Remember that the actual amount of coverage that you’ll get will vary depending on the value of your assets, so making a very accurate evaluation of your company’s needs is critical to finding the right coverage policy at the right price.
Many professional associations also offer commercial liability policies to their members. These policies help protect companies from lawsuits that result from personal injuries on the job. Additionally, these liability policies can protect your business from liability claims from customers who get hurt on your property. Many commercial insurance policies also include medical coverage. This coverage can help protect your business in the event that a customer has an injury while on your property.
When it comes to purchasing commercial insurance, there are two basic choices: purchasing a general liability policy, or purchasing specialized policies that target specific industries or locations. General liability policies cover damages that you or your employee’s cause in a workplace. For example, if you hire someone to paint your building and he or she damages the wall because he did not use the proper safety equipment, this will be covered under the policy. However, if you had installed safety equipment on the walls that were not in use, this too would be covered. If you have employees working in your warehouse and they accidentally trip and fall due to bad electrical wiring, this too would be covered by your insurance.
In addition to general liability insurance, many business owners purchase professional liability insurance to protect themselves against lawsuits resulting from negligence or errors-in-fact. For example, if you purchased office furniture and flooring that were substandard, you could be sued for injuries. Professional liability insurance protects business owners from such lawsuits, allowing them to get back to focusing on their businesses instead of worrying about being sued.