In this contemporary era, many business owners are seeking to increase profits so that their businesses can experience continual expansion. Although there are many ways for businesses to accomplish this goal, purchasing high-quality business insurance is often a uniquely effective way to do so. As many business owners know, property damage caused by even the most random occurrences like an employee who threatens to sue the company after slipping on spilled coffee and subsequently breaking an arm can put a sizeable dent in a growing business’s wallet. By learning more about how insurance can help curtail these types of expenses and more, you will likely be able to help your company avoid unnecessary costs, so it can concentrate on generating perpetual growth.
Business Insurance-A Basic Definition
Although broadly defined, business insurance is basically protection against operational losses by a business.
Different Types Of Coverage
The type of coverage included in an insurance policy is contingent upon the policy wording, local limitations, and other variable factors. There are several different types of coverage, and some of them include:
1. Key Person Insurance
In the world of business, a “key person” is one who is so important to the business that his or her loss would result in formidable damage to the company’s economic future. By having key person insurance, a business can ensure that benefits are paid in the event that this individual develops a disability or experiences some other type of extenuating circumstance and is thus precluded from working. Key person insurance can also include provisions in the event that the individual dies. When the valued employee passes, the business’s remaining partners can then appropriate the benefits for legitimate business expenses such as any hiring and/or training expenses that might be incurred when the individual is replaced. In some cases, key person insurance is referred to as a buy/sell agreement.
2. General Liability Insurance
General liability insurance is a type of insurance that protects businesses against things such as negligence, liability claims, bodily injury, property damage, and personnel or manufacturing errors. In many events, liability insurance will cover any legal fees incurred by the policyholder if the liability is covered through the policy.
3. Product Liability
Product liability is a form of coverage that protects against things such as faulty products, injury, damage, or death from the use of a faulty product. This type of insurance covers the manufacturer’s liability for losses to a buyer, bystander, or user affected by a malfunction or defect of a product. For example, if an individual bites into a candy bar that contains a piece of glass and experiences internal organ damage as a result of swallowing the glass, general liability insurance could protect the business who made the product. When product liability insurance is included within a commercial general liability policy, it is often referred to as products-completed operations insurance.
If you are a business owner and want to ensure that your company can experience continual growth and expansion, purchasing insurance can be of great advantage to you. By considering the information listed above, together we can make an informed decision regarding which type/s of insurance would be most beneficial to your business.