Regardless of its industry or size, every business is exposed to some form of risk. It is therefore very important to have some form of insurance coverage to mitigate such risks. If a business is uninsured, one disaster or lawsuit can cause the business to incur enormous losses and even shut down. Here are some of the important insurance policies businesses should consider buying:
1. Professional liability
Also referred to as the errors and omissions (E&O) insurance, the professional liability insurance is very important for every business. This kind of insurance protects your business from liability in the event of negligence, errors or malpractice in the provision of services to your clients. However, when it comes to professional liability insurance, there is no one-size-fits-all policy. Every industry has its unique risks which should be addressed in a customized policy.
2. Commercial property
This type of insurance covers everything regarding the damage or loss of company property as a result of occurrences such as wind and hailstorms, vandalism, smoke, fire, and civil disobedience. The definition of ‘property’ could cover everything from business interruptions, buildings and lost income to company papers, money and equipment. Property insurance policies usually come in two forms: peril-specific policies and all-risk policies. Peril-specific policies are very important for businesses which are located in areas where there is a high risk of specific incidences. For instance, if your business is operating in an area which is politically volatile, this would be the right insurance for you.
3. Product liability
Companies can be held liable for the safety of products which they retail, distribute or manufacture. Product liability insurance will shield your business from financial loss in case a defective product causes bodily harm or injury. The level of insurance you buy should be determined by the kind of product you manufacture or sell. For instance, an electrical appliance store carries more risk than a clothing store and thus requires a higher amount of insurance.
4. General liability
General liability insurance covers legal proceedings which result from claims of negligence, injuries and accidents. Such policies protect your business from incurring payments due to medical expenses, property damage, slander, libel, settlement bonds, bodily injury or the cost of defending lawsuits.
5. Workers' compensation
Companies should have workers’ compensation insurance for all their hired employees. In case an employee is injured or dies in the course of their duties, this policy will cover disability, medical treatment and death benefits. This kind of insurance is important for all kinds of work environments, not just those associated with high risk like factories. Even a simple slip-and-fall injury in an office setting could result in a hefty claim.
Vehicle insurance is very important for any company that owns vehicles. This will protect the company against liability in the event of an accident. It would be advisable to get a comprehensive insurance that not only covers the vehicle, but also insures against third party injury.
While one type of business insurance would suit one business, it would not be a good fit for another. It would therefore be advisable to consult a qualified insurance broker or agent to advise you on the best kind of insurance for your business.