Commercial business insurance is different from home insurance in that there are different risk factors that can affect your business. A lot of this will depend on what type of industry you are in, the number of employees you have and how you operate as a business. To help you choose the best commercial insurance for your business, let’s look at factors that are important to consider.
Are There Specific Risks Associated with Your Industry?
You may have a business that operates with heavy machinery. This may require a certain amount of skill and knowledge to operate. It may also require that specific maintenance and safety checks are carried out when the machinery is used. This type of business will be considered to have a high risk to the personal safety of employees. You will therefore need to ensure that the level of workman’s compensation is sufficient should any work-related injuries occur. Your business may also work with hazardous materials that are poisonous, corrosive or flammable. Once again, this is an elevated level of risk for your business. If you are unsure of specific risks that you should be insured for, contact an industry association. Many of these industry associations have adequate insurance as a prerequisite for membership. They should also be able to provide you with information on the levels of insurance coverage you should have for your specific industry.
What Liabilities Are Associated with Your Business?
This can be linked to specific risks related to your industry. For example, if you are a medical practitioner, your greatest risk and associated liability would be malpractice. If you are in the service industry, you may rely on employees to deliver a specific service level. If you are a manufacturer or retailer, the products you carry are supposed to be safe for consumer use. However, occasionally products get contaminated and people can fall ill, or employees may fail to do their job properly and this could result in the customer getting injured. If the product or service is related to your business, your company could end up being liable for that injury. In many states, liability insurance is mandatory for certain industries. Make sure you are aware of the possible liabilities associated with your business and that whatever commercial insurance policy you take out incorporates adequate cover for liability risks.
What Do You Need to Consider in Terms of Commercial Property Insurance?
Sometimes business owners overlook property insurance because they do not own the premises that they operate from. However, your business will still have machinery, office furniture, computers, inventory and materials. All of these items usually are essential for your operations. If you lose a large quantity of your raw materials, will you still be able to operate? If you no longer have computer systems or machines, will you still be able to manage your business? When trying to establish if property insurance is important for your business, try to think of all the different things that are important for the operation of your business. What can you not operate without? These are the things that need to be covered as part of your commercial property insurance policy.
Think if there were to be a fire on your business premises that resulted in the loss of machinery and inventory. Certainly the cost of replacing the materials may be covered by insurance but will your customers still be around when you reopen for business in a few months’ time? Will your business survive the interruption to its operations? You will probably still have accounts and salaries to pay. If you do not have an insurance payout to help you manage your cash flow while you are out of operation, you may not have a business to return to in a few months.
Are There Employees Who Are Key to Your Business?
As a business owner, your personal knowledge and management abilities may be the reason for your business’s success. What would happen to the business if you were injured or no longer able to fulfill your role at work? In the same way, you may have some employees in key positions that are essential to the functioning of your business. If this is the case for your business, take the time to look into key person insurance and make sure that the business is adequately covered for this.
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