The best defense against crippling legal claims, in addition to risk assessment and other precautions, is the right combination of insurance coverage. Business insurance policies cover a wide range of potential liabilities, such as slip-and-fall accidents on company premises, claims by employees, and injuries from product defects. This section contains articles on how to save money on insurance policies, the different types of business insurance, what to do if your product causes injuries after a business closure, traffic accidents by employees, and related matters.
Different Types of Commercial Insurance
The most common kinds of commercial insurance are property, liability, and workers' compensation.
Property Insurance - Property insurance covers losses and damages relating to real or personal property. Common variations on property insurance include:
- Boiler and Machine Insurance
- Debris Removal Insurance
- Builder's Risk Insurance
- Glass Insurance
- Inland Marine Insurance
- Ordinance of Law Insurance
- Tenant's Insurance
- Crime Insurance
- Fidelity Bonds
Liability Insurance - Liability insurance covers injuries you cause to third parties.
- Errors and Omissions Insurance
- Malpractice Insurance
- Automobile Insurance
- Directors' and Officers' Liability Insurance
Worker's Compensation Insurance - Worker's compensation insurance covers the employer for employee on-the-job injuries. Businesses are typically required by state laws to provide some form of workers' compensation insurance but also prevent employees from suing their employers for negligence relating to on-the-job injuries.
Why You Need Business Insurance
Insurance covers business owners when an accident happens despite their other precautions. Even the most careful businesspeople can find themselves liable for the serious injury of a customer or another misfortune that causes a significant loss for the business. The following circumstances could result in a claim against your company even if all reasonable precautions are made.
a secretary requires surgery and physical therapy to correct their carpel tunnel syndrome;
a burglary results in the loss of all of your computer equipment;
a salesperson maligns a competitor publicly resulting in a defamation suit against your company;
a customer slips on a recently washed floor and injures themselves;
a warehouse employee has been stealing and selling your stock;
a number of children become ill after eating cookies you make where you neglected to list an ingredient that is a common allergen;
while driving a client from the airport to a meeting your employee has a car accident injuring themselves and the client;
a senior executive suffers a heart attack when you tell him he will be relocated and get a pay cut.
Do's and Don'ts: Business Insurance
Determining the kind and amount of insurance your business requires can be complicated. It can be difficult to make generalizations since the type of product you deal in and many other factors may impact the kind of insurance that is most important for you. However, there are some general considerations that apply to nearly every business.
- DO - use an insurance agent experienced in your kind of business, shop for the best price and take written estimates, take notes when speaking with agents, check your insurer's solvency, read proposed policies carefully, confirm that your contractors carry their own appropriate insurance, keep a list of business property, and inform your agent of changes to your business.
- DON'T - hire an agent who won't tailor a policy to your needs, hide unusual risks from your agent, buy a low cost policy, accept a policy unless it covers your needs, underinsure for a reduced premium, buy an insurance policy that covers your landlord's liability if you are renting, assume your theft policy covers employee personal property, exaggerate the extent of your damages, or assume that your personal auto or homeowners insurance will cover damages that arise out of your business activities.
