Understanding The Types Of Business Insurance You Need
Companies, even tiny enterprises run by one or two people, face exposure to potential losses on many fronts. Finding the right commercial insurance for your company is important, and it requires a bit of discussion about what your exposure actually is. Let's take a look at 5 of the most important kinds of insurance a business should carry.
Commercial General Liability
If your business is open to the public in any way, there is always the risk that an accident could occur involving a member of the public. Even if you're just inviting an occasional client or two to an at-home office, it's unwise to operate without commercial general liability coverage. This ensures that you'll have coverage if something like a slip-and-fall accident occurs.
The possibility of a fire, flood, storm, vandalism or theft at your place of business is something you have to guard against. Do not make assumptions about what your coverage actually is. Especially when it comes to concerns about storms and flood waters, you'll want to verify your policy includes that type of coverage. If you have inventory, stock or parts at your site, you'll also want to confirm that they're covered.
Errors and Omissions
Entering into contracts and agreements with customers and clients opens up legal exposure. One of the most common sources of trouble is what are called errors and missions. This is often included in professional liability policies, and it covers issues that may come up regarding how services and advice were provided.
It's a good idea to evaluate the biggest agreements you enter into to establish what your full exposure is. When your business expands or you take on bigger contracts, it's also prudent to reassess your exposure and consider a new policy that accounts for that.
If you manufacture or fabricate items, especially ones that go into wide use by the public, you have exposure to product liability suits. Product liability law covers a wide range of injuries that can happen, such as when safety components fail, parts fly off or fastenings come loose. Given the wide circulation of a product, even one production run with serious and dangerous defects can create massive financial hazards for a company.
Directors and Officers
When lawsuits hit, it's common for a plaintiff to sue everyone possible. D&O insurance indemnifies company officers and directors, and it may advance their legal defense costs, too.