5 types of business insurance
There is also Insurance coverage opportunity that’s available for every conceivable risk your business might face. The cost and amount of insurance coverage of policies vary among different insurers. To get this better, it’s advised you discuss your specific business risks and the types of business insurance that’s available with your insurance agent or broker. Also, your insurance agency can give you a good advice on the exact types of business insurance you should consider purchasing for your business. Below are the types of business insurance you should know before making your choice.
- General Liability Insurance
Business owners, both the big and small businesses purchase general liability insurance to cover their legal hassles due to claims of negligence, accident and injuries. These policies protect businesses against financial payments as the result of bodily injury in an accident, libel, property damage, slander, medical expenses, the monetary cost of defending lawsuits and settlement bonds or the judgments required during the time of an appeal procedure.
Companies that are into
- Product Manufacturing
- Product wholesale
- Product Distributing and
- Product Retailing
May be liable for the safety of their products at each level until it gets out of their hands. Product liability insurance gives financial protection for loss as a result of a defect product that causes injury or bodily harm. The amount of product liability insurance you should purchase depends on the products you manufacture or sell. For example, a clothing or fashion store would have far less risk than a small appliance store.
Related: Business protection insurance
- Professional Liability Insurance
Business owners that are basically into providing services will need to consider having professional liability insurance (which is also known as errors and omissions insurance). This type of liability coverage gives protection to your business against errors, malpractice and negligence in provision of services to your clients or customers. Depending on the type profession you are into, you may be required by your state government to carry such an insurance policy. For example, the physicians are required to purchase malpractice insurance as a working condition of practicing in certain states in the U.S.
- Commercial Property Insurance
Commercial Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers and money.
Property insurance policies come in two basic forms:
- All-risk policieswhich covers a wide-range of incidents and perils except those noted in the policy. All-risk policies basically cover risks faced by the average small business size.
- Peril-specific policieswhich cover losses from only those perils listed in the policy. Examples include crime, fire, flood and business interruption insurance. peril-specific policies are normally purchased when there is high risk level of peril in a certain area. To know about the type of business property insurance best suited for your small business, kindly consult your insurance agent or broker.
- Home-Based Business Insurance
This type of insurance provides financial back up for businesses that at based from home. Contrary to popular belief, homeowners’ insurance policies do not generally cover home-based business losses. Depending on risks type of your business, you can add riders to your homeowners’ policy to cover your normal business risks like property damage. However, homeowners’ insurance policies only go so far in covering home-based businesses and might need you to purchase additional insurance policies to cover other risks involved, like the general and professional liability insurance.