Types of Business Insurance
Posted on: 4 June 2021
Every business faces several risks like theft, property damage, loss of income, and employee injuries. A business without insurance can face lawsuits, substantial financial costs, and potential closure. Business insurance ensures that your business can quickly recover from risk incidences. However, there are many business insurance policies in the market. Understanding them can help a business owner to get adequate coverage. So, what are the main business insurance policies in the market?
Property Insurance
Property insurance offers protection for your business properties. Such items may include business equipment, furniture, appliances, and inventory. Ordinarily, these properties face the risk of loss and destruction from theft, fire, or natural hazards. Thus, it is essential to insure business properties, especially those with a high market value. In the event of a risk incident, the insurance company pays the policyholder the cost of damage or replacement. However, some natural hazards like floods require a separate property insurance policy.
Product Liability Policy
Any business that manufactures and sells products face the risk of product liability legal suits. Typically, a company can get sued in case of product failure or defects. More so, a product may have negative health impacts on consumers or cause technical accidents. In such a situation, the client may sue the company for personal injury. Having a product liability means that the insurance would cover the damage.
Automobile Insurance
It is essential to insure business vehicles. Vehicle insurance policies, such as third-party injury or comprehensive coverage, offer protection for your car in case of accidents and theft. More so, they cover the cost of liabilities resulting from damages and injuries incurred by third parties. Therefore, a business with vehicle insurance reduces the risk of lawsuits.
Business Interruption Policies
A business interruption policy helps a firm to reduce financial losses resulting from operational disruption. When a business closes down due to a natural disaster or fire, it experiences financial loss. The business insurance replaces the lost income. Again, the policy can meet operating expenses such as rent, payroll, and taxes when a business relocates temporarily. However, the policy may not cater to losses incurred from civil disruptions and pandemics.
Employees Insurance Polices
Businesses that hire employees are obligated to have workers' compensation insurance. This insurance protects employees in case of work-related injury and illness. Besides, the policy also benefits a worker's family in case of death resulting from workplace accidents. Specifically, workers' comp policies provide the following benefits to staff:
- Payment for medical care
- Disability benefits
- Funeral costs
- Replacement for wage lost
Equally, employee insurance policies protect the business owner from personal liability suits. The insurance coverage will pay for damages if workers or their families sue for compensation.
The ideal entrepreneur runs a business safely. However, it is not always possible to eliminate risks from a work environment. Having business insurance allows you to transfer such risks to the insurance company.
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