If you operate a business, there are several aspects of insurance that you should consider. Bear in mind that insurance is simply one strategy for risk management. There are other practical strategies that businesses can employ to protect them from risks such as safeguarding valuable property in locked facilities, avoiding high risk processes or activities, or utilizing security and alarm systems. These things have nothing to do with insurance products, but the result is that they protect your business from loss.
When viewing insurance as a protection against loss, we must understand that losses could be incurred in the form of physical loss to tangible property, or through financial losses due to claims against the company. Insurance is designed to provide economic relief under these circumstances.
Losses to property can be caused by any number of things, but it will primarily involve damage to buildings, autos, or business personal property. Buildings and personal property are often covered under a single form. When procuring insurance for this aspect of your business, it is important to determine the value of your buildings and personal property at a given point in time. Buildings may be simple to determine, but business personal property may fluctuate if your business is seasonal, or if there is a natural ebb and flow to inventory. Business policies will often have value reporting forms that allow you to specify how much insurance you require during certain months. Your premium will typically be adjusted accordingly.
Claims may arise against the company can arise from injured workers, injured customers, property damage incurred by others, or product liability.
Workers compensation coverage is designed to pay for injured workers. Businesses are required to carry this coverage by law and the benefits will include lost wages and medical bills incurred by workers injured on the job. Disability insurance is also mandated by law, and is designed to replace a workers wages who becomes injured and unable to work, but whose injuries did not occur on the job.
Commercial general liability insurance is designed to protect businesses from liability claims that may arise on premises, off premises, or resulting from the insured’s product. This coverage is one of the most important insurance purchases a business can make, as a single liability verdict could destroy a company’s balance sheet. When establishing this coverage it is important to evaluate the company’s overall assets as they are put in jeopardy in the event of a liability claim.
Careful consideration should be taken when reviewing business insurance options. Specialty agents and brokers can be consulted that have experience in your industry, and you may find that a specific broker may be required for your liability insurance versus your workers compensation insurance.