Insurance coverage that protects businesses from losses due to events that may occur during the normal course of business is called business insurance . What type of loss is covered by a business insurance policy depends on the insurance company, the policy wording, and local limitations . There are many types of insurance for businesses including coverage for property damage, legal liability and employee-related risks. Companies evaluate their insurance needs based on potential risks, which can vary depending on the type of environment in which the company operates. Let us See Types of Insurance a Small Business Owner Should Have
General Liability Insurance :
Every business, even if home-based, needs to have liability insurance. Business owners purchase general liability insurance to cover legal hassles due to accidents, injuries, and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure. General liability insurance is just one type of insurance for mechanic shops, for example, out there, and different industries may find that they need to get additional insurance to cover areas in their specific company that not every business will necessarily need, so it’s well worth looking up what insurance a business will need in order to ensure they have all the protection they will need.
Product Liability Insurance :
Protection against financial loss arising out of the legal liability incurred by an insured because of injury or damage resulting from the use of a covered product or out of the liability incurred by a contractor after a job is completed . Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. The amount of insurance you should purchase depends on the products you sell or manufacture.
Commercial Property Insurance :
This policy provides cover for property contained in business premises, stocks owned by you or held in trust and commission. It can be further extended to cover cash, valuables, securities kept in a locked safe or cash box in locked steel cupboard . Property insurance policies come in two basic forms
1. all-risk policies covering a wide-range of incidents and perils except those noted in the policy.
2. peril-specific policies that cover losses from only those perils listed in the policy.
Professional Liability Insurance :
This is a form of liability insurance that helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm.
Business owners Policy (BOP) :
Insurance companies selling business insurance offer policies that combine protection from all major property and liability risks in one package. One package purchased by small and medium sized businesses is the BOP . Package policies are created for businesses that generally face the same kind and degree of risk. Larger companies might purchase a commercial package policy or customize their policies to meet the special risks they face.
There are few other Insurances for Business owner , the above ones are must for a Small Business Owner .
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin