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How to Protect Your Business With Business Insurance

Updated on October 10, 2015

Understanding How Business Insurance Works

Insurance always seems to be a complicated matter to deal with, but with the complexity of a business enterprise, you need to know how to protect your business with a business insurance. To do this, you need to have a simple and basic logical understanding of how a business Insurance works for your business. Business insurance may have everything tailored for the protection of your whole business, covering every aspect of it, from an employee’s injury to a natural calamity that may harm your operation temporarily, or end it up. Some Insurance may be required by law, business partners, associates, investors or lending institutions for the security of the business investment they have or will be infusing. However, mandatory or not, it is always safe to have your business protected at all times as part of your contingency measures.

There are lots of business insurance companies out there that offer competitive features and costing, but you must know how to make the right choice to take advantage of their business offers. No matter how these insurance companies are glamorously dressed to attract clients, each one had to covers the following general features.

Business Insurance Policy

A right business insurance will secure your future.
A right business insurance will secure your future.

Property Insurance

When you have your business, every asset is important that you need to manage them pretty well. Assets could be fixed such as buildings and equipment or they could be those products and services you are providing to the general public. Since assets constitute almost everything you have in your business, surely you don’t want to lose even just a minor portion of it for that will mean a loss on your revenues. Business are supposed to maximize their profit and minimize cost. If there’s anything that can give security to your business regardless of its size in terms of equity, It’s none other than a Business Insurance Policy.

Property insurance covers relatively everything affected, either lost or damaged, by natural and man-made disasters such as smoke, fire, wind, hail storms, typhoon, vandalism or any form of civil disturbance. A property may include lost income, business interruptions, equipment, devices and other business assets. Since a property is a very subject and may come with various meanings, a property insurance is divided into 2 basic forms: the All-risk policy and the Peril-Specific Policy.

All-Risk Policy covers a wide-range of incidents and dangers or perils except those stated in the policy. This generally covers various risks faced by an average small business. The Peril-Specific Policy, on the other hand, covers losses resulting only from those dangers listed in the policy. This kind of policy may include losses due to fire, flood, crime or any business interruption. Generally, this kind of policy is purchased when there is high a risk for a certain kind of danger in the area of business. To be able to choose which kind of policy is best suited for your company, you need to be aware of the possible dangers that could threaten your business operation.

A Property Insurance will be responsible for the cost of repairs or replacements of physical assets in times of disasters such as fire, storm, vandalism or civil disturbance.

Secure Your Assets With Property Insurance

Property Insurance provides security to your business/
Property Insurance provides security to your business/

Liability Insurance

Liability is something you owe to another person or business entity. However, liability is too broad a term for an insurance coverage and unless broken down into more specific ones, it is sure to create misunderstandings in the business Insurance world. So, in order to avoid this, liability insurance is divided into 3 categories: The General Liability, Product Liability, and Professional Liability.

General Liability Insurance

A legal hassle is something that a business entrepreneur may not want to be entangled with as this can mean additional cost, a waste of time that could have been productively spent in the business operation and not to mention the amount of stress it can give to you as the business owner. Again, if you don’t want any legal hassle to get into your nerves, then you need to procure a business insurance policy with a liability insurance coverage.

To protect your business from legal hassles due to loss of property, life or injuries as a result of an accident or negligence, you need to have your business covered by a Liability Insurance. This type of Insurance will protect you from claims of body injury, property damage, medical expenses, libel and slander as the insurance will cover the cost of defending lawsuits and settlement bonds required during an appeal procedure. A

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Product Liability Insurance

A business that sells a product is always liable for its condition. As a business owner, you can never tell when a trouble may arise. Trouble could always come in form of a defective product that may cause physical harm to anyone especially when the product is consumable. When this happens, this can cause you to be liable to the customer who had purchased the defective product. It is during this time when product insurance can come handy and useful. It can help you and your business against claims by any affected customers.

Product Liability Insurance can protect you or your employee from claims against property damage or injury caused by your products or services offered. Any legal issue and cost arising from such claim is included in the coverage of the product liability insurance. The assessment for the cost of this coverage varies depending on the risk involve in your kind of business. Consumables are likely to cost more than non-consumable products.

Business Insurance Coverage Checklist

Coverage Option
Low Priority
High Priority
Property Insurance
 
 
Liability Insurance
 
 
Workers Compensation Insurance
 
 

Professional Liability Insurances

Even professionals and other service provider are not exempted from business threats. A threat such as death or loss of life or a part thereof is something quite traumatic for a professional. If you are a surgeon and you are facing a serious charge of malpractice, this will surely beat the hell out of you. Your license will surely be revoked and that will be the end of you. Situations like this will give you enough reason to make a search for a good business insurance coverage to ensure you of professional liability insurance.

If you are a full-fledged professional or a practitioner such as physicians, pharmacists, health consultants, surgeons, and other high-risked professionals are mandated by law to purchase malpractice insurance for public assurance. This type of insurance coverage provides protection for your business against malpractices, errors and negligence in the provision of services to the general public.

Workers Compensation Insurance

Industrial companies with large equipment are high risk and can be life-threatening to their workers. You can never tell when an accident befell one or a number of them and f that happens, you are bound to be liable to meet their claims and satisfy your employees' medical needs. In the event of an accident or disease which can earn you interruption in your business operation, if you are armed with a Worker’s Compensation Insurance , you can make a quick return to work possible as your insurance company will take he responsibility off your hands.

Additional Benefit for Your Workers

Secure your business against workers accidents through Workers Compensation Insurance.
Secure your business against workers accidents through Workers Compensation Insurance.

Business Auto Insurance

It is safe to say that every business is sure to have its own transport facilities and because, of them, it is safe and useful to you if you have business auto insurance. This will protect you from any problem arising from any auto-related accident that can put any of your worker, particularly drivers in danger and can get you or anyone in your company driving your business transport vehicle back on the road again quickly after an accident and ensure your business is protected against losses from injuries to other drivers, passengers and pedestrians for which you and your employees are liable.


Business Crime Insurance

Another business protection that comes with your business insurance coverage is the Business Crime Insurance. This feature can protect you against fraud, theft, forgery or robbery.

Remember that every business is unique in itself and if you want your insurance to work well for you, then you need to know your preferences before getting one.

Now that you know how this business insurance works and how it can be useful to you and your business, you need to customize business insurance according to your business needs.

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