When setting up a new business, it is very tempting to only purchase the minimum amount of business insurance required by law. This is called liability insurance. This kind of business insurance protects against risks to third parties. An example is the lawsuit launched by an employee who falls on an icy sidewalk in front of your store.
Often by the time the new business is up
and running, the owner is so caught up in the day-to-day management
of the venture that he or she never bothers to take a second look
at other business insurance options. Many new business-owners don't
look into purchasing additional coverage until they find themselves
struck by a worst-case scenario.
Hindsight is not any better than foresight
when it comes to dealing with such matters as faulty inventory,
spoiled product, theft, accidents and attacks on your reputation.
This is why it is prudent to make sure you are covered in the case
of any eventuality that could possibly sink you financially.
To purchase the business insurance that is
right for you, it is essential to define the exact nature of your
operations. For instance, if you are running a business that manufactures
paraffin candles you may want to consider buying Property Insurance
that protects you in case of an explosion. A florist may opt to
purchase Goods in Transit insurance in case flowers wilt on the
way to their destination. A health professional, such as a dentist
should purchase Professional Indemnity insurance. This is in case
that little old lady, who is never happy with the way her dentures
fit, decides to sue.
Business insurance is divided into three
basic categories: Liabilities, Property and Buildings and Business
Assets and Equipment.
The most common kind of liability insurance
is Employer's Liability insurance. In most countries, you cannot
start a legal business without first taking out this kind of business
insurance. This coverage ensures that you are not stuck with the
bill if one of your employees suffers illness, disease or injury.
This type of insurance is a must if your business entails working
with heavy machinery, heights or volatile materials.
Another type of liability insurance is Public
insurance. This is recommended for those in the service or supply
industries. This insures you in the event that a member of the public
is injured, diseased or hurt by your business practices. Examples
of the kind of scenario that would require liability business insurance
are the little boy who is bitten by a goat at your petting zoo,
or the car that is hit by your outdoor swinging sign after being
pried loose by a furious storm.
You are liable for manufacturing a faulty
product that causes death, illness, disease or injury. Keep in mind
that even if you are just a supplier of this product, the consumer
could also sue you. Product liability insurance ensures that you
don't take the fall for selling a product with a manufacturing defect.
This kind of business insurance is essential for both manufacturers
and suppliers. For instance, if a customer's child suffers harm
because or a faulty baby swing, both the manufacturer and the seller
might be liable for the medical bills.
In most medical practices, Professional Indemnity
insurance is mandatory. This type of business insurance provides
protection against clients or customers who feel that they have
received negligent treatment and as a result have incurred health
or financial losses. If your business involves constancy of any
kind, including financial, chiropractic or counseling, you need
to consider investing in Professional Indemnity insurance.
Key Man insurance is recommended for small
businesses that rely heavily on two or three people to keep the
business thriving. If you should lose an essential Colleague for
any reason, you are financially compensated for the missing link
in your corporate structure. This insurance is essential for multi-media,
design, advertising and travel firms.
The world seems to be full of personal terrorism
these days, and no business is immune to vandalism or willful destruction
of property. Sometimes this damage can lead to a serious loss of
business. An example would be a bar that accidentally hosts a brawl
between patrons that destroys the liquor inventory. Business Interruption
insurance helps business owners cover the shortfall caused by this
kind of scenario, as well as replace any profits lost while the
damage is repaired.
Depending on what country you live in, the
limits on these kinds of business insurance varies greatly. Coverage
ascends to amounts as high as 15 million U.S. dollars or ten million
British pounds. To find the best price, it is highly recommended
that you shop around and contact as many company representatives
as possible to get an accurate quote on your business insurance