The Importance of having the right business insurance.

By J. Jason Astwood, LUTCF, FSCP

Introduction

In the business world, every decision is important. From the location of your store or office to the types of products you offer, each choice can have a major impact on your bottom line. However, one area where many small businesses are neglecting to invest is in their business insurance coverage. Business insurance covers many types of risks that your company may face over its lifespan and helps protect against losses due to unexpected circumstances like theft or lawsuits. In this article we will discuss why having the right business insurance is important as well as provide specific examples of coverages you should consider when shopping around for liability protection.

The Importance of Business Insurance

Business insurance is a great way to protect your company and its assets, as well as yourself, in the event of an accident or lawsuit. Here are some of the benefits:

• Liability coverage will protect you from financial damages if someone sues you for negligence or wrongdoing.

• Property insurance covers the cost of replacing any physical property that gets destroyed or damaged in a fire, flood, or other natural disaster. If you own your building, this can be especially important because it's unlikely that you'll be able to afford repairs on your own!

• Equipment breakdown coverage helps pay for costs associated with repairing damaged equipment—and even replacing it if necessary—because of things like power surges and lightning strikes. This type of policy also typically includes protection against theft or loss due to burglary; should anything happen while an item is being transported between locations (such as construction), there may not always be time before repairs begin after receiving notice about what happened.

Covered Perils

The following is a breakdown of the types of perils that are covered by business insurance:

• Fire, lightning, smoke, explosion and collapse

• Theft including burglary, robbery and theft from vehicles.

• Vandalism including malicious damage to property by third parties (e.g. violence).

• Windstorm or earthquake if it occurs within your premises or while you are on site but at another location within the insured period.

There are also coverages available for employee negligence such as products liability, pollution liability and some cyber-liability coverage as well as an excess option on all policies that allows you to transfer liability away from yourself back onto your insurer in certain situations where they believe they should be responsible instead.*

General Liability Insurance

General liability insurance is one of the most basic types of coverage a business needs to protect itself from financial loss. It protects against lawsuits brought on by your company's negligence or intentional actions, covering costs such as legal fees and damages awarded by a court.

General liability insurance covers these areas:

• Property damage. If you accidentally cause damage to someone else's property, general liability will cover the cost of repairing or replacing the damaged items at no extra charge to you. This can include vehicles, machinery and equipment that's been damaged while being used on your premises.

• Personal injury claims resulting from accidents on your premises (or caused by an employee) are also covered under general commercial liability policies—but only if those accidents are not considered intentional acts within the scope of employment (e.g., assault charges). Otherwise, it doesn't matter if it was an accident or not—you'll still need professional help from an experienced attorney after suffering one in order to avoid further legal issues down road!

Errors and Omissions

What could go wrong? The best way to protect yourself and your business is with errors and omissions (E&O) insurance. This coverage can protect you from claims that you failed to provide adequate legal, accounting or investment advice. A common example of an error is when a client files a lawsuit claiming that the lawyer’s recommendation caused them financial loss. Errors also include situations in which there was no attorney-client relationship between the parties, as well as situations where there was an existing attorney-client relationship but it was not properly maintained by the lawyer or firm.

The E&O policy will pay for attorneys fees so long as they are related to defending against such claims. They also help pay court costs if they result in litigation beyond mediation or arbitration; they reimburse clients who have been damaged financially by any negligence on your part; and they cover other expenses associated with defending against claims made by third parties against your practice (such as costs associated with investigating the matter).

Commercial Auto Insurance

Commercial auto insurance covers physical damage to your company's vehicles, injuries to passengers and other drivers and property damage caused by your vehicles. If you are a contractor, you need commercial auto insurance because the business will be liable for any damages or injuries caused by employees driving their personal cars on the job.

The best way to protect yourself from these liabilities is with an umbrella policy that offers extra protection above what is available through the individual policies.

Commercial Property Insurance

Commercial property insurance is a type of business insurance that covers your building, inventory and other materials. It can also cover the cost to repair or rebuild your property if it’s damaged by fire, vandalism or natural disasters.

This type of coverage is different from residential property insurance because it often includes certain additional benefits like:

• Business interruption – This can help you pay for lost income while your business is closed due to a covered loss (like a fire).

• Inventory replacement – If you have to replace your inventory after an insured loss occurs, this will reimburse you for those costs.

Workers' Compensation Insurance

Workers' Compensation Insurance is a type of insurance that protects your employees if they get injured while on the job. It covers medical expenses, lost wages, and other benefits. Workers' Compensation Insurance is required by law in most states.[1] If you don't have this type of insurance and one of your employees gets injured on the job, they could sue you for damages. If an employee sues for workers' compensation benefits that were already paid out by the insurer, it's considered double dipping and the employee will have to reimburse them.[2]

Having the right business insurance will protect your employees and your bottom line.

A business insurance policy is designed to protect your employees, your business, and all of the assets you have invested in starting or running your company. It can also protect you against liability issues that might arise from accidents on-site or while traveling for work.

Business insurance policies are a must-have for any company that has employees and/or operates out of a physical location. You may be tempted to save money by skipping this important part of doing business, but it’s not just about saving—it’s about protecting yourself and the people who work for you by keeping them out of harm's way as much as possible.

Business owners need to consider what kind of coverage they need based on their own personal situations and the type of business they run before purchasing a policy from an insurance provider; however, there are some basic types that are commonly offered through most companies:

Conclusion

There are many different types of business insurance, but the most important thing to remember is that you should have a plan in place that covers your needs. So if you’re looking into buying new insurance or updating your current policy, contact us today at (801) 224-0165 / www.astwoodins.com so we can help!