No business owner wants to witness their business being wiped out or pulled down. Yet, that is a real danger that every company faces. If you own a business, you know how hard you have worked to set it up. You want to do everything in your power to protect business from the risks it is exposed to every single day during the ordinary course of activities. Business insurance is designed to do that.
The right insurance can ensure your business runs smoothly. It can cover your employees when you are liable for an accident that occurs in the workplace. The right insurance can even prevent your business from coming to a standstill or you from having to pay for losses and damages from your pocket in case of an unfortunate incident. In short, business insurance can give you the peace of mind you deserve. But which business insurance should you buy? Here are four types of cover for business claims to protect business from lawsuits.
1. Professional Liability Insurance
What it is: A business insurance for professionals and business owners. It is also known as Errors & Omissions (E&O) insurance in some industries. Medical practice insurance is a form of professional liability insurance.
Why you need it: Misunderstandings, clerical errors, failure to meet deadlines, and failure to disclose can all expose your business to professional liabilities.
Suppose an unhappy client or customer initiates a lawsuit against your business. In that case, professional liability insurance covers any legal liability that arises from allegations of errors, omissions, or negligence on your part.
Some causes of action for a professional liability lawsuit that insurance will cover include:
· An allegation that you did not meet industry standards or performed careless work.
· Failure to follow through with a business agreement, which led to a breach of contract.
· Failure to fulfill your professional duties, which a client hired you for to complete.
· Allegations that you made a mistake in your professional services.
What it covers: Professional liability insurance covers court costs, the cost of hiring a lawyer, settlement costs, and judgment costs up to your policy limit.
What it does not cover: This insurance does not cover criminal prosecution. Some forms of legal liability (under civil law) are omitted (please check the list of liabilities your policy covers). Data breaches, cyber liability, and technological problems may or may not be included in a professional liability policy.
2. Property insurance
What it is: Insurance that protects your business or company’s physical assets/property. It is also known as commercial property insurance.
Why you need it: Fires, burst pipes, vandalism, theft, and explosions, as well as weather-related afflictions like storms, wind, smoke, snow, lightning, etc., can cause severe damage to your property. Replacing damages can be a very costly affair. When you insure your business’s property with property insurance, the insurance covers the cost of repair or replacement of:
· Tools and equipment used to conduct your business.
· Furniture at the place of your business.
· Computers used to run your business.
· Outdoor landscaping – for example, fences and decks.
· Personal property located at your business.
· Any inventory stored in a warehouse or at your office.
· Vital documents and other accounts receivable.
What it covers: Property insurance pays for costs associated with repairs or replacements. It also covers any lost income as a result of not being able to conduct your business. Any customer injuries that occur at your company are covered by property insurance.
Business owners can also claim the actual cash value, the replacement costs minus the depreciation. If prices have gone up (for example, construction costs), the insurance pays can pay more than the coverage limit.
What it does not cover: Some property insurances are limited to damages within your office premises. So, they might not cover things like vehicle accidents. So, if you drive to client meetings, require hauling equipment to worksites, use mobile equipment, or rent vehicles on business trips, ensure your property insurance has the necessary coverage.
3. Vehicle insurance
What it is: Insurance that covers your company’s use of any vehicle(s) used to run your business.
Why you need it: Vehicle insurance can protect you from any liabilities in case of an accident involving any vehicle used to conduct your business.
What does it cover: Vehicles protected by vehicle insurance include your company’s cars, vans, trucks, or any other vehicle used to conduct business activities. It also covers any vehicle leased, hired, or owned by your company and all employee-owned vehicles used for business.
Businesses can buy additional coverage such as collision coverage, liability coverage, comprehensive coverage, and coverage for specified perils.
Vehicle insurance covers any injury or damage to property sustained in a vehicular accident. It also covers costs associated with the repair of any damages to the vehicle. If your employees use their private cars to conduct any business work, their insurance might not cover accidents related to business activities. In that case, business vehicle insurance will cover their vehicles too.
What does it not cover: Business vehicle insurance does not cover general maintenance, any damage caused by normal wear and tear, and intentional damage.
4. Workers’ compensation insurance
What it is: Business insurance that covers the lost wages or medical expenses for your employees. It is also referred to as Workers’ comp.
Why you need it: Give your employees peace of mind that they will be compensated if they fall sick or end up with an injury related to the work they perform. Most states require employers to invest in this insurance for their employees.
What it covers: Workers’ compensation insurance covers costs associated with vocational rehabilitation services, medical expenses, lost wages, and might even cover death benefits (survivor’s benefits). It does not matter who is at fault – your employees can receive this benefit for any injury or illness.
Some examples of what Workers’ comp covers are:
· Back injuries caused by repetitive movements.
· Carpal tunnel syndrome.
· Lung infections caused due to breathing in toxic substances.
· Slips and falls at work.
· Injuries sustained in an accident when driving for business.
What it does not cover: Workers’ compensation insurance will not provide coverage for:
· Injuries or illnesses not related to the work they perform.
· Any injuries sustained in an accident when your employee was not commuting to or from work.
· Any injury caused intentionally to one’s self.
Conclusion There you have it – four extremely vital insurances designed to protect business from lawsuits for negligence, errors, accidents, injuries, illnesses, and damages. Get appropriate cover for business claims – consider the risk level and areas of risk for your business, and then invest in the appropriate insurance. With the right insurance, you can ensure you and your business are not burdened with massive financial losses. Are you looking for tips for business insurance? Find out more here.