From the day the contractor begins a business, he is exposed to some risks. Even before the first employee is employed, a business is at risk, so the right insurance is important. An action or a catastrophic event could be sufficient to wipe a small business out before it can even get out of business. Fortunately, companies have access to a variety of insurance types to protect them from these dangers. There are certain types of insurance which a company must have sooner or later.
1. Professional liability insurance.
Contra negligent claims for damages that arise from errors or non-performance are covered by a professional responsibility insurance, also known as E & O (E&O) insurance. For occupational liability insurance, no one-size-fits-all policy exists. There are a number of concerns each industry has, which are addressed in an individual policy for a company.
2. Property insurance.
Whether a company owns or leases space, insurance is a requirement. In the event of a fire, storm or theft this assurance includes equipment, signs and stocks and furniture. However, events such as floods and earthquakes in mass destruction are usually not covered by standard property insurance. Check your insurer for the price of a separate policy if your area is vulnerable to these problems.
3. Workers’ compensation insurance.
The compensation insurance for employees should be added to the insurance policy of a company once the first employee is hired. The treatment, disability and death benefits will be covered if an employee is injured or dies from working with this company. Although employees appear to be working at a low risk, slip and fall injuries or medical conditions, such as carpal tunnel syndrome, could lead to a costly claim.
4. Home-based businesses.
In their own homes a lot of professionals start their small businesses. Unfortunately, in the way business property insurance does, the policies of homeowner do not cover domestic businesses. Ask your insurer for additional insurance to cover your equipment and inventory in the event of a problem, when you are running your business outside your home.
5. Product liability insurance.
If your company makes products on the general market for sale, the insurance for product liability is a must. Even a company which makes every effort to ensure its products are safe can be named for the damages caused by one of its products in the lawsuit. In such a case, product liability insurance works to protect a business with coverage that can be specifically tailored to a particular type of product.
6. Vehicle insurance.
When company vehicles are used, they should be fully protected against liability to protect companies in the event of an accident. At least companies should cover the risk of damage to third parties, but the vehicle will also be covered by comprehensive insurance in a crash. If employees use their own vehicles in business, they will be covered in case of an accident by their own personal insurance. One major exception is when goods or services are delivered at a fee. This applies to delivery staff.
7. Business interruption insurance.
If a catastrophic or disaster happens, the transactions of a company are probably interrupted. During this time, your company will suffer loss of revenue because your employees are unable to work in the office, produce goods or make sales calls. This type of insurance applies in particular to businesses that require a physical location, such as retail shops. Insurance for business interruption compensates for a business' lost income.
A company can avoid a significant financial loss as a result of a lawsuit or a catastrophic event by having the right insurance. See with your insurer what insurance forms are advised for your business type and implement them as soon as possible.
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