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There are more options than ever before when it comes to business insurance.
There are still traditional coverage types, such as business owners insurance and business auto. Yet, there are also new options, such as coverage for cell phones and computers, business interruption insurance, extra liability coverage, and more.
While you’re reading this, you might be wondering why you need business insurance at all. In short, you need it to protect your business if something goes wrong.
Let’s say your business is in a bind and you need to pay a large sum of money to settle a lawsuit.
Business insurance options will vary by a company’s structure, industry, and state of operation.
In general, you should have a basic insurance package, which is a combination of liability, property, and workers’ compensation insurance.
When you are looking to purchase insurance for your company, you should use a professional business insurance agent to get the right coverage.
You don’t want to get stuck with an inadequate policy, which could leave you out of business if a severe accident occurs.
Looking for the right business insurance plan is a vital part of any business. It can be an overwhelming task to choose from all the different types of policies out there, but you need to do your research and find the one that will provide you with the best protection.
Business insurances cover many things, but understanding these different types will help you determine what kind of coverage you need for your business.
Some of the primary forms you will want to look into includes:
- Key Man Insurance
- Property damage liability
- Public liability
- Business interruption
- Bodily injury liability
Key Man Insurance
Key man insurance provides a continuing income stream to a business when there is a death or incapacitation of a key person or employee.
It essentially is a form of life insurance that protects the financial future if the business owner dies or becomes unable to work.
Simply put, it is a kind of life insurance that protects the business rather than a sole individual.
The idea behind key man insurance is to protect the business from bankruptcy if the business owner meets with an accident or becomes seriously ill.
Key man insurance policies are usually purchased by the business owner or the business itself.
The business would then have the necessary funds to hire a suitable replacement without coming to a grinding halt.
The process of determining who is the key person(s) in a business can be a complex one. Still, an experienced broker should be able to assist in identifying the key people in your industry.
You can often compare quotes online via websites such as https://www.mykeymaninsurance.com/, where they help you find the best quotes.
Property Damage Liability
Property insurance can protect you from the financial losses that you may suffer in the event of a covered loss to a building or other insured property, arising from, but not limited to:
- Fire
- Wind
- Theft
- Vandalism
- Malicious mischief
- Falling objects
- Ice, snow, or sleet
In addition, property insurance may also protect against losses arising from your liability for accidents on or near the insured property.
Property damage liability insurance is a part of a business insurance package and helps pay for the cost of damages to other people’s property you cause.
You may need this type of insurance because you may be liable for any damage you cause to others’ property or equipment.
An excellent example of this can occur if you own a store, and one of your workers drops a box of product, breaking a window.
The owner of that window may file a lawsuit against you.
A small percentage of property damage liability coverage is enough to help pay for the damage you cause. Still, this type of coverage only covers up to a specific amount of money.
Public Liability Insurance
Public liability insurance is an insurance policy that covers the costs of the damage caused to a third party by an insured party.
It also is known as third party liability insurance (TPL) and is more commonly known as third party insurance (TP).
Public liability insurance coverage protects you from paying damages if someone gets hurt while visiting your company premises.
Some of the typical accidents that could lead to liability insurance include:
- Dog bites
- Product defects
- Slips and falls
- Electrical shock
- Vandalism
- Trespassing
- Theft
Essentially Public Liability Insurance protects your business against compensation claims if you cause injury or damage to someone or their property.
It is often a legal requirement for every business that carries out activities that might harm the public.
Business Interruption Insurance
For most small businesses, a natural or man made disaster could ruin them forever.
For example, in a food processing company, if there is a poor crop due to drought or flooding, their supply of raw ingredients may be harmed, leaving them unable to fulfill orders.
This is why a business owner should consider purchasing business interruption insurance.
Business interruption insurance will reimburse the business owner for lost income or fulfillment penalties incurred if a covered disaster happens.
It’s important to note that this type of insurance is not the same as a general liability policy, which covers your business in the event of injury, property damage, or any other kind of damage caused by your company.
Business interruption insurance compensates you for the loss of income as a result of the covered risk.
Bodily injury liability
Bodily injury liability coverage protects you from consequences of physical injury you cause to others and expenses you are required to pay to others because of bodily harm you caused to those people.
This insurance covers injuries to others that were caused by your negligence such as in the case of auto accidents.
Bodily injury liability business insurance is relatively common for businesses that serve the public, like restaurants, hotels, and other establishments.
It protects you from being sued for physical injuries or property damage you cause to other people or their property.
A standard policy insures you against bodily injury claims that exceed a specific dollar amount, called the “per person” limit, and the total amount of damages that exceed a specific dollar amount called the “aggregate” limit.
Summary
If you’re in business, you’ve heard the terms “business insurance” and “business liability” before.
Without it, some kind of financial disaster could befall your company, like a lawsuit that threatens to put you out of business or property damage that costs thousands of dollars to repair.
Now that you know what these different types of business insurance are, it’s time to get started searching for the perfect business insurance scheme for your needs.
The first step in the process is to assess your needs. It would help if you defined the risk factors you need to look out for, and you should create the ideal plan for your situation.
Remember, though, that even if you’re already insured, you should maintain your existing coverage to avoid getting a surprise in a time of need.
The process of searching for the right protection starts with understanding more about the different types of business insurance and how each of them can affect your company.
