Business Insurance: Explanation Of Business Insurance

As a business owner, you know about risk. Business insurance is about risk management. It comes in many forms and covers all kinds of contingencies. An accident or a lawsuit can debilitate and even ruin a company, especially a small business or startup. Keep your cash flowing and avoid pitfalls by investing in business insurance.

Business insurance covers the risks inherent in doing business. You have customers coming on to your property, handling your merchandise, and possibly using your vehicles. You have employees that need health insurance and workman’s compensation. You also have your buildings and equipment that are susceptible to fire, wind, rain and earthquakes. You may find yourself in a lawsuit regarding a client claiming contract errors or delays in completion, or possibly a customer or employee who has been injured or even killed on your business site.

General business liability insurance is a form of business insurance that covers a wide variety of common issues. It is also the minimal coverage that businesses are required to have by state law. Each state has different rules. Contact your state to ensure you meet their requirements.

Small businesses are most vulnerable and can be destroyed by one unlucky incident. How much insurance and how much coverage are among the toughest questions a business owner needs to answer. The question is, should I put my precious profit toward insurance to cover all the just-in-case scenarios, or do I invest that money back into the business to make it stronger and more profitable? How much insurance can I afford to have and how much can I afford not to have?

Business Insurance: Explanation Of Business Insurance

There are several ways to lower your business insurance premiums. One stems from the fact that most insurance premiums are a tax deduction; learn your state tax laws and what they can do to help reduce your rates. Another way to save money is to purchase business group insurance, which usually comes in the form of health or life insurance. There are group discounts available to you and your employees.

As the owner of your business, you are aware of its unique risks. As a small business, buy coverage for the basics and for the most probable scenarios. As your profits increase, you can adjust your policy and invest in protecting yourself from the less probable situations.

Making business insurance a high priority is important to your company’s future.

Business Insurance: What Does Business Insurance Cover?

Business insurance covers everything from business errors to employee death. There is a seemingly endless array of business types and business insurance must keep up and offer a wide range of insurance coverage. Insurers have divided business insurance into a few categories.

  1. Property insurance covers against the risk of damage to buildings, vehicles, equipment and all other items at the location of your business. Property insurance can be narrowed down to a specific risk such as fire or flood.
  2. Casualty insurance covers against the risk of lost business if you suffer a loss due to an event beyond your control. Property insurance and casualty insurance are combined by most insurers.
  3. Liability insurance is there if your business or any of your employees have been negligent and a customer decides to sue you for restitution.
  4. Commercial auto insurance, or fleet insurance, will help get your vehicles moving again after an accident.
  5. Workers compensation and state-specific employee insurance, such as a “stop-gap” plan, are mandatory. Workers compensation is governed by your state and each state has different laws. However, the overall purpose of workers compensation is to keep employees from suing your business for on-the-job injuries and provides them with coverage for their medical and other injury-related expenses.
  6. Business interruption insurance will replace any profit lost due to an unforeseen event that prevents your business from operating normally. There are a wide variety of scenarios that can be covered, such as property damage resulting from bad weather or vandalism.
  7. Health insurance is a great benefit to offer your employees and aids in creating a positive work environment.
  8. Life and disability insurance helps to ensure the continuation of a business in the wake of the death or disability of a key employee. Usually this insurance is for high-level management or co-owners of a company.
  9. Scripted insurance is for a business that has unique circumstances. For example, a movie star will insure a certain body part when their career becomes dependent on their trademark legs or smile or tongue.

Business insurance will keep you protected and keep you in business.

Business Insurance: Who Needs Business Insurance?

Business Insurance: What Does Business Insurance Cover?

When you enter into a business arrangement with another person or business, you are taking a risk. The possibilities for error, whether accidental or on purpose, are endless. A company needs to protect itself from problems inherent to its type of business.

  1. Retail and service industries are generally in contact with a large number of people on a regular basis. A retail business needs to protect itself from liability due to customer injury, as well as from expenses incurred from damage to its buildings and property caused by customers.
  2. Residential homes or office building owners need coverage for any resulting income losses due to tenants breaking leases and property damage.
  3. Small businesses can be closed down due to one misstep. Having business insurance will guard against such possible events.
  4. Home businesses have a number of unique problems. Exposing your home to a work environment can create a web of issues, including having clients on your personal property. There are many issues home insurance does not cover and a home business needs business insurance to keep you protected from liability and damage.
  5. Farmers and ranchers have unique risks that most businesses do not face. Loss of a crop or herd due to the effects of disease or illness or other calamity can ruin a farm’s future.
  6. Bond insurance protects you from your bonded employees that mishandle and steal your company’s valuables. When your company requires bonded people to manage or secure your money and other valuables, you want to protect yourself from dishonest employees.
  7. Professional insurance is for companies that offer a professional service such as engineering or dentistry. In the event that a client claims negligence on your part, you can cover the expenses incurred in defending your business.
  8. International business insurance offers coverage for the unique situations that occur from doing business with other countries. Today, foreign business and trade is common and can expose your business to a large number of additional financial risks due to political or government unrest, terrorism and war.
  9. Cyber insurance is available to cover your online business from the liabilities caused by Internet hackers gaining access to your accounts and customer identities.

Insure and protect your business against its inherent risks.

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