The adoption of insurance coverage began slowly in the US over 100 years ago. It was originally designed for people that wanted to avoid catastrophic losses that could derail their lives to the point where they could never recover. In today’s modern world, people buy insurance for some of the same reasons that they did over a 100 years ago, and also because it is required by mortgage holders, government bodies, and the public wants to be protected as well. For many businesses, having top quality insurance is a badge of honor that they use in sales presentations to help close the deal. For whatever reason, or combination of reasons that you decide to insure your business, it’s important to know, what your business needs, what’s required, and what’s protected.
In Order To Get Most Business Licenses You’ll Need To Prove You Have Insurance
There are several reasons for this, one of which is to weed out bad contractors that can’t get insurance coverage because they’ve done fraudulent things. Cities and counties require businesses to have liability insurance that protects the public in case the business does something that causes injuries. There could be dozens of different mistakes that a business could make, not repairing the sidewalks in front, allowing ice to build up on the steps during storms, or stacking merchandise too high in the store so that it falls on a customer. Municipalities want all businesses to be responsible, have insurance, and protect their customers.
However, the liability portion of a business insurance policy is only part of the package and there are many other parts that are at least as important as liability. Most companies are going to want to be covered for theft, either by employees or outside thieves, that steal their equipment or merchandise. There is usually a high theft deductible for most larger businesses, especially if it’s merchandise, so that the insurance company is only covering major losses.
But if a store is robbed of large sums, or if an employee embezzles from the books, that would be something that would be covered under business property coverage. That same coverage would also cover the equipment and merchandise if there were a storm, fire, sudden flood caused by broken pipes, or vandalism as well.
Product Liability Insurance Is A Valuable Coverage
Depending on the type of business you have, if you’re selling products of any kind, you’ll need to have what is called product liability insurance. This coverage would cover any product sold or service provided, that causes some kind of injury for which the company gets sued for. In the case of many products, it’s hard to imagine what some customers will do with some products and then sue for. Coffee that’s served too hot, parts of a toy that cause kids to choke, products that are tainted with germs or impurities, all can end up in court.
In some cases, like a retailer, the ultimate responsibility for a tainted product may lie with the manufacturer. However, it’s a common problem that the maker of a product is overseas and difficult to find to sue in court. The attorneys will often sue the retailer, distributor, and manufacturer, not knowing which company has the deepest pockets or best insurance. This coverage would usually include defense lawyers for court and payments for the injured party up to the limits of the policy. If the business you have has a lot of exposure, like a manufacturer of products that can spoil, this is important coverage to have high limits on.
Loss Of Use After A Covered Loss
Lots of companies overlook this very important coverage. Many business policies have this as part of their package or as a separate rider for an extra charge. What it covers would be the setup and restart of a company after a catastrophic loss. For instance, a major fire, that would cause a company to be shut down for months while it rebuilds. This coverage might pay for a temporary location, moving machinery and equipment to the new location, and almost anything else that it takes to get a company back in business while it waits for its original location to be rebuilt.
Power outage insurance is also something that a lot of companies need as well. Some businesses need electricity to operate machinery and make their products. Other times the electricity is to keep huge quantities of food from spoiling. Any loss of power for an extended time could put a company totally out of business so this coverage is a necessity for them. It can also be extended to cover the spoilage of food products; however, the insurance company will want to know that all options to save the food were exercised in any claim.
Many Companies Have Fleets Of Vehicles Too
It’s possible for a business to have their fleet of cars, trucks, and semi-tractors all insured on one large policy. Sometimes it can be a money saver depending on what the other risks involved are. Insurance companies like to spread risks and bring in more money by the month while covering important parts of a business that are less likely to have claims. This allows them to cover drivers, for instance, at a reduced rate if they have the entire company covered in all other aspects.
This can also work out well for a large company that wants to have all of their insurance under one comprehensive policy with one payment and a dedicated agent or underwriter to manage it. That way they can develop more of a partnership arrangement that can benefit both parties in reducing losses and lowering premiums.
If you have a business that needs coverage, you can get dozens of quotes from different agents. Agents that only specialize in business insurance, such as Procom Insurance Company, are better equipped to answer all of your questions and know the coverage you need more completely. In that case, an agent that advertises they only write business insurance would be what you’d want to look for in order to obtain the best advice from an experienced broker.