Home | Finance | Insurance

Different Types of Business Insurance

By: Aeronx Mc Mall

Read More About Insurance

So you're ready to open a business. You've worked out your operating costs and inventory expenses but what if something goes wrong? Whether you own a manufacturing plant that is damaged by a fire or a restaurant that accidentally serves up some undercooked chicken, unforeseen expenses ranging from reconstruction to lawsuits could put you out of business permanently. This is why it's important to take precautions, such as good business insurance coverage.

Although the term "business insurance" is relatively broad, it can be divided into a number of more specific categories.

Property Insurance
Property insurance is still a pretty broad term but it basically refers to coverage of damage to your businesses location as well as its contents. It's often broken down into various kinds of coverage. For example, fire insurance would be one variety of property insurance. While this coverage would only pay for damages related to fire, there are other kinds of coverage available for everything from harsh weather to vandalism. A good package will combine coverage for all major disasters that can be befall your business and property.

Liability Insurance
This kind of coverage pays the damages related to any incident where you or your business is at fault. This can include anything from overall negligence on the part of the business to an on-site accident that causes injury to the person or property of customers or employees. It also covers you in the event that one of your employees is the cause of a problem. The bottom line is that liability insurance protects you financially in the event that your business is sued.

Commercial Auto
You most likely already have auto insurance but it's important to note that your personal insurance is not responsible for any vehicles used by your business. If you own a business that uses vehicles, you are required by law to purchase a commercial auto insurance policy for those vehicles. Commercial auto coverage usually covers both damage caused to the vehicles and damage caused to others by the vehicles.

Workers' Comp Insurance
While this varies with each state, nearly all states require your business to purchase workers' comp coverage. The workers' compensation system prevents a worker from suing their employer over an on-the-job injury, on the condition that the employer pays all medical bills, as well as related damages. Workers' comp insurance allows you as an employer to cover what could otherwise be sky-high costs.

Business Interruption Insurance
Let's say you run a popular restaurant. One night after closing, your walk-in freezer shorts out and you arrive at your restaurant the next day to find yourself with spoiled inventory and a broken freezer. What's worse, you find out that it will take a week for your new freezer to be installed, and until then, you're out of business. Now, your property insurance might cover the replacement costs of the freezer and your inventory but what about that week when you had to close up shop? Business interruption insurance covers any losses you might suffer as a result of being temporarily unable to operate your business due to an accident.

Life and Disability Insurance
Depending on the type of business you own, this may or may not be for you. Life and disability coverage insures your operation against a situation where a key employee dies or is otherwise incapacitated. If a partner in your business is covered by a life insurance policy naming the business as the beneficiary, the partnership could potentially receive a payout to purchase the deceased partner's share of stock from their estate.

While these are among the most common types of business insurance, you might find that your business has highly specific insurance needs not discussed here. If this is the case, you could very well be in need of what is called a "scripted policy."

Scripted policies usually carry some combination of the above types of insurance, as well as additional coverage related to the unique risks associated with a particular business. Additionally, scripted policies can cover specific individuals. A famous example is the movie star and dancer from the 1940s, Betty Grable. Her career was so dependent on her legs that she was able to insure them for millions of dollars. Many athletes and performers have since taken out scripted policies related to a body part.

Overall, it's important to have a thorough understanding of any and all potential risks associated with your business. This would include losses that you might suffer, as well as damages and losses that others, such as your customers and employees, might suffer with your business being at fault. Once you've thoroughly reviewed every possible worst case scenario, you'll be ready to choose which types of business insurance are right for you.

Article Source: http://depositarticles.com/

For consumers looking for insurance online and where to get the best insurance quotes possible, look no further than 2insure4less.com. Whether it is auto insurance, home insurance, health insurance, life insurance, cancer insurance, disability insurance, business insurance quotes or burial insurance, 2insure4less has helped countless consumers find insurance online.

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Insurance Articles Via RSS!
Additional Articles From - Home | Finance | Insurance
Sign Up for a free account.
Our other websites
All about SEO
Beauty Tips Forum
Submit Articles
Member Login
Link Us
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Sitemap
New Stuff
About Us
Developer
Good shopping portal
Link to Us
Contact Us
Privacy Policy
Terms of Service

counter easy hit

Powered by Article Dashboard