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What Types Of Basic Insurance To Buy For Your Business?
Insurance are used to cover damages from accidents or different tragedies that may occur along the life’s path. Personal insurance is a way of life for most famous personalities.
Car insurance is most familiar to those who have vehicles. But business insurance is unfamiliar for ordinary people.
The benefits of having insurance are not for those who are engaged in big business but also for small enterprise.
Those who wants start a business may opt to get an insurance coverage that will benefit both the owner and the employees.
There are basic types of insurance that covers a business.
Here are some of the basic insurance that may be suitable for a business.
1) Property Insurance
Property insurance covers any damage on the structure and its contents on a business.
It financially reimburses the losses caused by damage or theft.
There are two categories of Property Insurance; a ‘name-peril policy’ which covers losses that is specifically identified as covered and an ‘all-risk policy’ which is comprehensive and more expensive.
A ‘name-peril policy’ offers policy that is specific in nature in terms of damages that certain circumstances incur in a business. If it says it will not cover damages from earthquakes, then it will definitely not.
An ‘all-risk policy’ covers almost all circumstances but not all. Property Insurance also offers protection from disasters, thefts, vandalism, fire and other calamities.
Some of the property assets that property insurance covers are as follows:
Buildings and structures
- Office equipments and furniture
- Paper Records
2. Life Insurance
Life Insurance is insurance that protects a person from unforeseen events and generally protects an individual and his family from extreme financial setbacks in case of accidents of tragedies.
In business, there is different life insurance available for each person that is a part of a business.
Insurance that protects and individual against accidents or injury while on the job. This is mandated by law and must be complied strictly.
Directors and Officers Insurance.
This type of insurance offers coverage for the directors and officers of the company that finds themselves in a legal situation, this type of insurance covers losses as a result of a lawsuit.
Business owner’s policy (BOP)
BOP is an insurance that may include business interruption insurance, property insurance, vehicle coverage, liability insurance or crime insurance.
This may cost less that personal life insurance that most business owner opts to acquire this policy.
Professional Liability Insurance
This insurance provides protection against individuals accused of faulty rendering of professional services. The damages incurred in litigations and lawsuits will be covered by this policy.
3) Liability Insurance
Liability Insurance is the insurance that provides legal protection for business.
If the business action, transaction directly or indirectly caused a damaged or losses against anyone, this policy will cover the damages incurred in the injured party.
It will also cover the business expenses in lawsuits.
Many insurance companies offer one or combination of different types of insurance but rarely offers the combination of three. Reading carefully the policy will save the business owner a lot of time and money in the future.
Do you really need insurance?
What a headache of a decision anyone has to make once he reaches a certain age or a certain event.
The bank wants you to have fire insurance to finalize your mortgage. The authorities require you to have auto insurance before you are allowed to drive on the road. And your mother is hassling you on why you do not have enough coverage when you are out there everyday putting yourself in hazardous situations.
Coverage protection is like something we need to buy instead of just something someone wants.
To many people, especially those who have never been in a situation where they have to make a claim, monthly insurance premiums are just extra expenses they pay for no reason at all.
Just like paying for channels on cable television that are never watched by anyone. But that is not the whole picture and a micro way to look at it.
Insurance plays a huge role in the local and global economy.
Without it, businesses might never have the courage to operate due to the risks of unforeseen losses. A fire can burn down the warehouse that stores millions of dollars worth of inventory belonging to a supermarket chain. A thief might steal your sports car while you are just out to buy some groceries. And even something as simple as making an online purchase can be more assuring when there is insurance available for shipping.
Without insurance, small businesses and mega organizations will stop functioning. Banks would stop lending as they have no certainty. And without proper liabilities coverage a restaurant can go bust just from a legal suit brought to it by a customer who fell in the premises.
Are you starting to see how the business world goes round?
Manufacturer in fear of products causing injuries will stop producing the latest breakthrough smart phones. Food processors will halt production in fear of causing harm to consumers who consume their food. Even your contractor will not take up your renovation projects for fear of injuries caused during the course of construction works.
But enough of how businesses need insurance. How does it apply to you as an individual?
When we talk about people, health insurance is almost always the first category of coverage being mentioned.
Who can say that they will never fall sick in future and that they will never get into an accident that incurs a mountain of medical bills.
Everyone falls sick. And accidents can always happen to anyone.
So protection from the heart-stopping medical bills can be more of a common sense action.
But other than that, insurance to protect your house, your assets and yourself from lawsuit costs, can be something you are thankful for if a situation arises where you have to make a claim.
Can you imagine that the only thing keeping you from becoming a bankrupt could one day be the $20/month policy you have been paying for awhile?
The pros overwhelmingly outweigh the cons in this instance.
Becoming a bankrupt will mean having problems accessing credit facilities, getting jobs, and being looked down on by your peers.
The concept of insurance is very simple. You pay a small premium and the insurer will protect you from financial setbacks.
The type of setbacks depend on the type of policies you buy.
It is a concept of pooling money from the masses and disbursing funds to those who make their legitimate claims. The hope from the insurer is that a claim never happens. While you want to transfer the risk of financial consequences to them.
It’s a concept that has worked for decades. Embrace it and see how it can help you. Peace of mind sure beats living in fear.