Managing a business is very challenging. It always puts your own finances at risky situations. It is wise and necessary to have knowledge on risk management to protect your business. The only way to do this is to have business insurance.
What is Business Insurance?
We use business insurance to protect our business from unexpected loss or damage.
We use business insurance to protect our business from unexpected loss or damage just as we use health or life insurance for better medical care, or to prepare for future expenses like education, or funeral. It is a form of risk management that can dramatically lessen, or avoid, loss and expenses from damages.
Business insurance focuses on assets and revenues, liabilities, and employees. These are the following:
- Professional indemnity. This protects you from legal action taken against you by an employee who suffered a loss due to management lapses, or by a client who is dissatisfied with your service.
- Business insurance covers damage to your building and its contents that is caused by certain events.
- Public liability. If you are liable for an injury or death, loss or damage to their property, or economic loss because of negligence, this covers your business for legal costs and compensation that you might be required to settle.
- Product liability. Businesses need cover against claims of goods or services that caused damage or loss, injury or death. Product liability cover protects you should your product or service failed your clients.
- Theft and burglary. This covers your business against loss or damage to your stock if burglary happens in your business premises, or if someone deceived you to gain access to your building. However, it does not cover cash losses as it is covered separately.
- This covers your money for theft at your premises and in transit.
- Your business can be interrupted by weather events, fire, flood, and other insured interruptions. This covers your loss when you can’t trade due to said events.
- Employee fraud or dishonesty covers loss of money, instruments or goods due to fraudulent or dishonest employees.
- Workers’ compensation. This is compulsory in all states with businesses with employees.
- Machinery/equipment breakdown. This covers machinery and equipment that you use in your business. This may also cover for damages to your products due to faulty or non-functional equipment.
Got other ideas on business insurance? Share your insights in the comments section.