Business insurance is a comprehensive package of individual insurance policies intended to safeguard the property, people, and operations of a business from unforeseen losses or damages. Business insurance is not static for every business and hence the policies included are subjected to change based on the size, type and the risks involved in the business. Hence, every business owner needs to look at different aspects of the business before taking insurance.
This article gives a basic idea on what all a business owner needs to consider while insuring his business, which aids in choosing a better policy that perfectly covers major risks associated with his business.
Policies that are required by state laws:
To protect the rights of the employee/employer/public many state governments have made some mandatory business insurance policies for different businesses. So, while looking for business insurance, the buyer has to start with the policies that are required as per his state's statute. For instance in UK, policies such as employers' liability insurance, motor vehicle insurance, professional indemnity, etc., are mandatory. However, the laws may vary based on the state and the business type. So, business owner needs to check the state laws and the policies which are applicable to his business before taking the policy.
Protection of the business property:
After considering the compelled policies, the buyer now needs to look at the possible risks/dangers/hazards/accidents that might cause significant harm to his business property. Building, vehicles, goods, stock, machinery and all other office equipment are different things which enable the business to perform various operations. Any damage to them not only causes significant financial loss, but also results in business interruption. Hence, they should be insured properly. Insuring the property which is vulnerable to risks that are specific to business type is very important.
The present society is highly litigation prone - if any injury happens to a person due to the negligence of the other party, the first phone call goes to a lawyer, instead of a doctor. So, any case filed against the business either by the public or the employee claiming for the compensation for the damage creates additional burden and also affects the reputation of the firm. Hence, in order to avoid such cases, including liability policies like public liability, workers' compensation, auto liability may help the business to survive.
Personal risk coverage:
While assuring protection to the business operations, public and employees, it is also necessary for business owner/partner/director to take personal protection cover. An executive coverage which protects the directors and the officers from any personal litigation or any other harm caused while managing the business should also be considered as a part of business insurance policy.
Now that we are clear on what are all the major aspects we need to consider while taking business insurance, the next step would be to approach a company which can suggest a best possible policy that extends its cover to all the major risks that might affect your business.
Instead of directly approaching an insurance company, it is advised to approach a reputed insurance broker as he may help you in assessing the risks and assist you in choosing the amount of cover required, besides directing you to the best insurance company.