Purchasing Insurance for your Business

A business insurance coverage will protect your business from losses as a result of events that may take place during the ordinary course of business operation. There are several types of insurance specifically designed for businesses such as coverage for property damage, legal liability and employee-related risks. A company must carefully evaluate their insurance needs based on the nature of its business, potential risks, the environment in which the company operates and many other significant factors.

Business insurance broadly refers to the class of insurance product which is intended for purchase by businesses rather than on an individual level. It accounts to about half of the U.S. property casualty insurance industry and includes “commercial lines” insurance products. The primary reason why businesses purchase insurance is to ensure coverage on potential damage to property, contract disputes and protection should a lawsuit arise. It will therefore be wise for every business to secure a business insurance coverage prior to its operation.

Business owners must carefully consider and evaluate their business’ insurance needs; otherwise, the individual partners may have more personal financial exposure in an event of a loss. If none of the members of the business has the capacity to effectively and efficiently assess business risk and its need for coverage, the business should work with a reputable and highly experienced Business Specialists for this kind of advice.

Also known as “commercial lines” insurance, the coverage can include property and casualty insurance products for the business. This kind of insurance helps the economy to run smoothly by providing a thorough protection of businesses from potential losses and this in turn allows businesses wanting to operate despite the risks involved.

The following are business insurance that a business might consider

  • Property Insurance

    It will cover equipment, signage, furniture, and inventory damage as a result of a fire, storm or theft. Events of mass-destruction such as floods and earthquakes are however not covered.

  • Professional Liability Insurance

    This will cover against negligence claims as a result of mistake or failure to perform. Each industry has its own unique concerns that should be addressed and this can be better discussed by your qualified Business Specialist.

  • Home-Based Businesses

    Since a homeowners policy will not cover home-based businesses, an inquiry must be made about additional coverage for your equipment and inventory if you are maintaining a home-based business.

  • Vehicle Insurance

    Every single vehicle used for business operation must be fully insured against third-party injury and ideally with comprehensive automobile insurance to cover the business' vehicle in an event of an accident.

  • Business Interruption Insurance

    This is especially applicable to companies requiring a physical location in order to conduct business as in the case of a convenience store. This type of insurance compensates a business for the loss of income as a result of an event that has interrupted the normal course of business operation.

  • Product Liability Insurance

    If your business is engaged in manufacturing, this type of insurance is very important as sometimes a business may find itself a party to a lawsuit as a result of damages caused by its manufactured products.

Reasons why a business should consider purchasing insurance

More often, businesses have a lot going on and it is therefore possible to have something like a business insurance overlooked. However, this is one of the considerations that a business must have prior to commencing its operation as a business. Insurance will protect your business from possible claims and lawsuits. A business can be sued about anything, even sometimes without making any mistake at all. For instance, if someone slips and falls in your business premises or when a client feels you haven’t done the job right, you could find yourself facing a claim for damages or a lawsuit. This scenario can be covered by your business insurance including the cost of defending your business.

There are some professions that will require you to have business insurance. Healthcare-related professions require a professional liability insurance or sometimes known as a “malpractice insurance”. There are even times that a contract will require that your business be insured. For more detailed insurance needs for your business, our dedicated team of Business Specialists will be able to assist you.

What are the associated costs in purchasing a business insurance?

The costs associated in purchasing a business insurance will depend on several factors such as: the type of industry you are in, the type of insurance coverage, the desired insurance benefits, and other factors. Some small businesses spend $50 a month or less for a general liability policy; but, your costs could vary depending on your specific circumstance. Our dedicated Business specialist can provide you with a rough estimate of how much it would cost your business to be insured and likewise give you options as to which insurance providers to consider.

The kind of insurance your business needs is dependent upon the type of business you have. Most businesses merely need general liability insurance especially when you meet clients face to face. However, if you offer professional services, you must also have professional liability insurance. If your business uses several pieces of equipment on the course of your operation like computers and other tools, you might consider a “business owners policy” which combines general liability and the coverage for your business’ property.

General liability vs. professional liability

A general liability insurance will cover someone’s claim for property damage, personal injury or bodily injury. It simply means that if anybody is injured within your business premises, or their property has been damaged, your business is covered and this likewise covers claims alleging that you have damaged someone’s reputation either by libel or slander.

On the other hand, a professional liability insurance covers you for conducts as a result of your professional services or advice. Sometimes they are called “errors” or “omissions” insurance and in some jurisdictions they are also called “malpractice” insurance. It covers something which you did, but should have not done and something which you were expected to perform, but failed to do the same. Professional liability insurance will protect your business for the costs in defending your case even if the claim against you is lacking merit.

Will you still need insurance even if your business is an LLC?

Yes, most definitely! While an LLC protects your personal assets if there is a suit or a claim against your business, this does not cover the assets of the business as they are still at risk. They can therefore be better protected by a business liability insurance which will ensure that the business’ assets are duly protected.

Our team of dedicated Business Specialists can better assist you with your business insurance needs, feel free to contact us today.