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Whether you’re looking to start a new business or you’re currently a business owner, there are a few things you need to understand about how to protect yourself. This article will look at how insurance can protect you and your business from various potential threats.
Workers’ Compensation
Buying workers’ compensation insurance protects a business owner from legal fines and lawsuits. The policy covers lost wages, medical expenses, and rehabilitation services. These benefits can help an injured worker recover and return to full strength.
Many factors determine the amount of workers’ compensation coverage a business needs. These include the size of the company, the number of employees, and the business’s risk exposure.
Businesses that operate in high-risk areas may pay higher premiums. This is because of the higher level of risk the business faces. For instance, a manufacturing plant has a greater risk of an accident than a small office.
Most state laws require insurance for business owners. However, they do not have to cover officers, partners, or subcontractors. In some states, commission employees are exempt from the policy.
If an employee is killed or injured on the job, workers’ compensation provides a funeral benefit. The benefit also addresses lost wages until the employee can resume working. It also addresses other medical costs associated with the injury.
Although workers’ comp does not have cost controls like health insurance, the policy will cover reasonable medical treatment. Depending on the state, the benefit may also address permanent disability.
Choosing the right policy is important for a small business. A workers’ comp policy can be tailored to fit the risks of the business. If a small business is involved in high-risk activities, it is particularly important to buy a policy.
Commercial Property
Purchasing commercial property insurance is a good way to protect a business from damage. This type of coverage can help cover repairs, lost income, and other expenses resulting from a loss.
The best way to determine how much property insurance you need is to take an inventory of your assets. These could include buildings, inventory, computers, and other costly items. You can also consider fireproof materials and improved HVAC systems to reduce premiums.
The cost of commercial property insurance depends on the value of your business. Larger businesses pay more for this type of policy. This is due to the higher level of risk. For example, manufacturing businesses are at greater risk for property damage than office-based businesses.
When buying commercial property insurance, it is important to compare policies. You can use an online comparison site to find the best deals. A broker can also answer any questions you may have about the coverage.
Professional Liability
Buying professional liability insurance protects a business owner from a variety of claims. The policy will cover a range of legal claims, including omissions, negligence, and breach of duty. The coverage will also pay for damages, including compensation and consequential losses.
Professional liability insurance is also known as errors and omissions insurance (E&O). It’s designed to protect a business from legal claims of malpractice. It is usually arranged on a claims-made basis. This means that claims are only made when the policy is active. The policy will also generally include an extended reporting period. The extension of the reporting period will only apply to claims that occurred during the policy’s coverage period.
There are a variety of professions and industries that qualify for professional liability insurance. There are different types of policies, and some are more expensive than others. The insurance cost may depend on the industry, the size of your business, and the number of employees.
Many small businesses will need both general liability and professional liability insurance. Often, the two are sold together. The premium for both types of insurance is often calculated according to state regulations. Some employers will require a specific amount of general liability coverage.
Business Interruption
Business interruption insurance can be a great way to protect your company from the effects of a natural disaster or another unexpected event. It can help you recoup some of the lost revenue and other expenses incurred during a business interruption.
A business interruption policy is a type of commercial property insurance that covers you against a loss from a peril listed on your policy. Some common covered perils include fire, windstorm, and water damage. You will want to determine the dollar amount of coverage you need. The cost of the insurance can vary depending on the type of business you own.
A business interruption policy may also pay for relocation costs or training expenses. In some cases, the policy will cover your lost revenue for up to a year. You can also purchase additional benefits, such as rent and mortgage payments. The premiums you pay for your business interruption insurance are tax deductible.
If your business relies on a specific location, such as a sports venue, it is a good idea to consider business interruption insurance. If the location is damaged, you might be forced to close. The insurance policy price will be based on the property’s value.
Your agent can help you decide how much coverage to purchase. Some policies can be very complex to understand. The best way to get the right coverage is to estimate the profits your business will generate over the next 12 to 24 months.
