When looking for the most appropriate business insurance, business owners rarely know where to start. This sad fact often results in the owners being sold expensive insurance packages that are simply unnecessary for the particular type of work in which they engage. There is, of course, a simple solution to this problem. Knowing the types of insurance available and knowing the type of activity in which the business in question engages will help any business owner to pick the right type of insurance for their business. The various types of business insurance are described in the sections below.
General Liability Insurance
General liability insurance is one of the most basic forms of cover available. It protects against any legal claims resulting from accidents resulting in injury, and from claims of negligence on the part of the business owner. If none of the other categories apply, every business should have at least this level of cover.
Product Liability Insurance
This type of insurance covers businesses which manufacture, distribute or retail a product. A customer can claim if a defective product causes them injury, so product liability insurance is required to protect the business against any law suits incurred from such an incident. There is also a variable scale for product liability insurance; those companies which sell dangerous products, like power tools and medical devices, will have a much higher product liability insurance cost than those which sell clothes or stationary, for example. Unless a business handles a product in some way, product liability insurance is unnecessary.
Professional Liability Insurance
If a business provides a service mediated by trained professionals carrying out a job, professional liability insurance is likely necessary. This type of insurance covers against lawsuits resulting from any errors or omissions on the part of the professional staff employed by a business, and may even be required by law for some professions.
Commercial Property Insurance
Depending on the exact conditions of the insurance policy taken out, commercial property insurance can cover a business against any damage to the fabric of a building itself, as well as providing cover against the items inside the property and making provisions for lost income as a result of damage to this property. There are two forms of commercial property insurance policy: all-risk policies and peril-specific policies. All-risk policies cover a broad list of conditions and are often more expensive than peril-specific policies, which are taken out in case of a specific threat which is higher because of the location of a business, or the type of work being carried out. Commercial property insurance can be incredibly complex, so it is especially important for any business owner to read and understand the fine terms of the agreement before agreeing to take out a policy.
Home-Based Business Insurance
Home-based business insurance is required in the specific case that a business operates out of the business owner’s home. It is a common misconception that home owner’s insurance policies will cover a business run from within the home, since most policies will not provide cover for loss of income or business related property in the case of an emergency. For this reason, it’s critical that any business owner carefully considers what their home owner’s insurance policy covers, and takes out any extra insurance policies required.
With each type of business comes different risks. The article above should help any business owner assess which type of insurance is most suitable for their business, and allow them to make the appropriate decision as to exactly what package they need to invest in. If you need more information, you can always do an initial search online for reliable insurance providers such as AXA Business for example and read up on their websites before deciding on the right package for you and your company.