Overview: The Different Types Of Business Insurance
As a business owner, you are likely more than aware of the need to insure your business.
Insurance is the ultimate protection against the myriad “what if” scenarios that can happen in the course of running your business. If your business goes through a difficult time that costs money to resolve, then insurance is there to ensure that you achieve business continuity, and keep your business books in the black.
However, business insurance is also complicated. There are different types of insurance covering a multitude of different scenarios, and it’s tough to know what your business actually needs.
In an effort to help demystify business insurance, below is a simple guide as to the different types of insurance– and ideas on whether or not your company needs each specific policy.
Product Liability Insurance
If you manufacture products, then product liability insurance can help cover you against any faults of that product. A Working ExampleYou make lawnmowers, and one of your lawnmowers suffers a fault that causes the blade to detach. The blade hits a fence, causing significant damage. Product liability insurance will cover the cost of the repair and any compensation you are required to pay. Do You Need It? Yes; the cost of repairs from product malfunction could genuinely bankrupt your business, so it’s not worth taking the risk and going without.
Property insurance is, as you may have guessed, insurance for your business premises. A Working ExampleIf your premises are broken into and stock is stolen, property insurance will provide coverage for the items lost and repair to any damage that was sustained. Do You Need It? Yes, if you have premises; you can compare policies at https://www.quotegoat.com/business/compare-commercial-property-insurance/. If you work from home, you will need to speak to your home insurance provider to see if you are still covered for protection on business-related items.
Worker’s Compensation Insurance
Worker’s compensation insurance is designed to protect your company against health and safety violations. A Working ExampleYou run a scaffolding company and a member of staff suffers an injury. They launch a legal case against you, claiming the job was unsafe to work on. Your worker’s compensation insurance will meet the cost of legal representation and any compensation. Do You Need It? Ideally, yes, but check your professional liability insurance– some policies for this include worker compensation as part of their coverage.
Professional Liability or Indemnity Insurance
Professional liability insurance covers you for any mishaps or problems that your business causes. A Working ExampleIf you run a construction company and accidentally drill through a water pipe, then product liability insurance will be available to help you recover the costs of the cleanup. Do You Need It? If you provide a service to the public, then yes, you definitely need professional liability insurance.
Industry relevant insurance
On an industry specific level you may also require specialist insurance, for example if you drive a taxi, you will need to take out taxi insurance to cover you, tradesmen may wish to take out tradesmen insurance, and restaurants will need restaurant insurance to name a few examples.
Now you have an idea of the different policies available, you should be able to wade through the confusion and find the coverage that your business needs.
Michael FooteOverview: The Different Types Of Business Insurance