Insurance is a very important thing to have in today’s day and age. There are many different kinds of insurance and each one serves its own purpose. For instance, car insurance helps the car owner to shoulder any liability related to the usage of a car. Things like busted windshields, broken side mirrors and even flat tires can easily be handled by a good and stable car insurance company. The same thing applies in the case of health and home insurances where liabilities related to the health and home are handled respectively. However, businesses can also be insured.
INSURANCE RELATED TO BUSINESS
Businesses are high-risk entities by nature. No matter how careful a business owner is, there will always be an element of risk. This is because every day, there are countless numbers of decisions which a business owner must make. Some of these decisions have to do with the products or services rendered by the business, and they may fall along the lines of what kind of product or service is to be rendered that day, how many people should be employed to provide those services, what kind of machines are to be employed in the course of providing that particular good or service et cetera. Each of these choices has its own sets of alternatives depending on several factors such as; the amount of capital available to the business, the scale of the business (i.e. small scale, medium scale or large scale), the level of technology available at that point in time and so on. Additionally, each of the alternatives has its own set of consequences.
Due to the scale of choices available for every decision involved in running a business, and the different possible consequences of each one, there is a high tendency to make wrong decisions or run which may result in loss.
An entrepreneur or business owner is a risk taker at their very core. This is reflected in the consequences of their choices (i.e. profit and loss). Many of these consequences come in the form of liabilities. Therefore, insurance is needed, to help the business owners to shoulder some of the risks and liabilities involved in running their enterprises.
WHAT TYPE OF INSURANCE SHOULD A BUSINESS GET?
There are all sorts of insurance relating to all the different kinds of assets which a company can own. However, these are some of the most popular and most required ones for many businesses:
- General liability insurance
This kind of insurance policy offers business owners – and their businesses – protection against common incidents involving their clients. There are several times when clients, customers and other individuals who are not employees of the business can get hurt as a result of activities that have to do with the business. For instance, delivery people may get hurt in the business premises during the course of dropping off supplies, or clients may experience some form of personal or bodily damage due to incidents which occur in the business premises or outside the premises but as a result of the action of a business employee. Aside from personal or bodily injuries, clients and non-employees may also experience some kind of liability related to their belonging, as a result of negligence on the part of the business or business employees. In cases like this, a general liability insurance policy will come in handy by assisting the business owner in footing the bills for all these liabilities.
It is very important for all small businesses to have a general liability insurance policy because this policy will go a long way in helping them handle bills such as settlements, court costs, judgments and lawyer’s fees. This is the main function of a general liability policy.
- Professional liability insurance
Professional liability insurance is another kind of insurance policy that helps the business owner to handle costs and liability resulting from the grievances of customers and clients. However, this kind of insurance policy does not usually cover other non-employees apart from customers and clients (i.e. delivery personnel are not usually included in the payout package). The kinds of liabilities covered by this insurance policy are those that arise as a result of work accidents or mistakes on the part of the business owner or employees of the business; particularly when these mistakes result in a loss of money – or any other kind of substantial loss – on the part of the aggrieved clients or customers. As with the general liability insurance, professional liability insurance is very important – particularly to small businesses – as it helps in covering costs such as settlements, court costs, judgments and lawyer’s fees. This is the main function of a professional liability policy.
- Workers’ compensation insurance
This insurance policy is very essential because it assists the business owner in handling the costs or liabilities related to bodily harm or damage to properties of employees. It is applicable to current employees of a business only, and it does not usually apply to former employees or workers who have been laid off before the incident that caused the liability occurred. The workers’ compensation liability policy helps in covering the costs of death benefits, missed wages and even medical bills of workers who need to foot the cost of these kinds of bills as a result of incidents or accidents which took place while they were doing their job.
- Cyber liability insurance
Cyber liability insurance is very important as it helps the business owner to foot the cost of liabilities arising from breach of data at their end. When this kind of breach leads to the exposure of sensitive information about customers and clients, it may constitute liability which the business owner will have to cover, as part of their responsibilities. The cyber liability insurance policy helps the business owner to foot the bill for legal expenses, credit monitoring, cyber extortion and notification costs which arise as a result of exposure of personal information in a data breach which occurred due to the activities of the business owner.