When it comes to running a successful business, insurance is rarely at the top of your list of priorities. There are always a lot of other things to organize, especially if you’re trying to grow the business or seek out new clients and contracts, however, you shouldn’t let manufacturer insurance stray too far from your thoughts.
There are many different types of business insurance policies on the market, which means you’ll need to do some research before you commit to a policy. It’s in the best interests of your business to make sure you choose the most appropriate level of coverage and a policy that will remain robust as your business grows and perhaps diversifies. This could mean moving to bigger premises, taking on new staff, or buying new equipment. However you run your company, your insurance needs to be able to adapt to it. If you don’t feel comfortable with your existing insurer, then now would be a good time to see what other companies have to offer.
Types of Business Insurance
Fire, theft, injury, accidental damage: these are all scenarios that face manufacturers on a daily basis. And with heavy equipment, staff, warehouses and other premises to consider, it’s only natural that incidents will occur from time to time. However, the last thing you need to worry about if a fire or theft takes place, is whether your insurance policy is going to cover it. However, if you’ve spent time researching and choosing your insurer carefully, and perhaps have built up a rapport with them, you know that you can make the call and your insurer will instantly be working to help you through any difficult times.
Liability Insurance
According to Investopedia Liability insurance is “Any type of insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice, injury or negligence. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable. Intentional damage and contractual liabilities are typically not covered in these types of policies.”
General Liability Insurance
General liability insurance covers liabilities due to claims of negligence, and injuries or accidents on the premises. General liability insurance policies cover losses due to bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
Product Liability Insurance
If your company manufactures, wholesales or distributes a retail product you may be liable for its safety. Product liability insurance protects you against a Lawsuit as a result of a defective product that causes injury or bodily harm. The amount of product liability insurance coverage you need is based upon the type of products you sell or manufacture. For example, a hand tool manufacturer would have much more risk than a paint store.
Professional Liability Insurance
Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance). This type of liability coverage protects your business against malpractice, errors, and negligence in the provision of services to your customers. Depending on your profession, you may be required by your state government to carry out such a policy. For example, physicians are required to purchase malpractice insurance as a condition of practicing in certain states.
Other Types of Business Insurance
In addition to liability insurance, businesses require other types of insurance as well.
Commercial Property Insurance
Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience, and vandalism. The definition of “property” applies to more than just tangible physical “real” property like buildings, equipment, documents, cash, and checks. It can also include intangible things like lost income due to business interruption.
Two Types of Property Insurance Policies
- Â All-risk Property Insurance Policies- which cover a wide range of incidents and perils. They may however have specific exclusions noted in the policy such as flooding.
- Specific Risk Policies- which cover only specific losses. Examples of specific risk policies include fire, flood, theft, and business interruption insurance. All-risk policies generally cover the major risks faced by the average small business, while specific policies are usually purchased to cover specific high-risk in your particular area.
Home-Based Business Insurance
Contrary to popular belief, homeowners’ insurance policies don’t generally cover home-based business losses. Depending on risks to your business, you may add riders to your homeowners’ policy to cover normal business risks such as property damage. However, homeowners’ policies only go so far in covering home-based businesses and you may need to purchase additional policies to cover other risks, such as general and professional liability.
Workman’s Compensation Insurance
Most states require businesses that hire employees outside of the owner’s immediate family to have “workman’s comp” insurance. If an employee is injured on the job, a Workman’s Compensation Insurance policy will cover their medical expenses and loss of income. In the case of permanent disability, a workman’s compensation policy can even provide benefits until the employee reaches retirement age. Rates are based on hours worked and the average injury rate for your specific industry. For example, construction workers who work with power tools are rated higher than desk-bound office worker because of the increased chance of injury.
Personal Disability Insurance
Most business owners aren’t required to cover themselves or any workers in their immediate family under Workman’s Comp. However, if they opt-out of coverage for themselves, they should look into personal disability insurance to protect themselves and their family should they become disabled. Typically group disability insurance only covers up to 60% of your salary (since they want you to have an incentive to get back to work). Individual policies designed for business owners on the other hand will often cover up to 70% or 80%. Benefits typically last for a fixed number of years (say five years) or until you reach retirement age.
Commercial Auto Insurance
If you have business-use vehicles, they will require commercial auto insurance. In addition to covering personal injury and property damage, commercial auto insurance covers the business for loss of use in the case of an accident.
Umbrella Insurance Policies
An umbrella policy covers things that your other policies may have missed or if a liability exceeds the limits of another policy. These policies are relatively inexpensive but often require business owners to purchase the maximum limits on all other policies before they will kick in.
At the end of the day, you need to have complete confidence in your insurance provider – you need to know that they’ll be at the end of the phone if and when you need them. That’s why research is so vital. You might discover that certain insurers don’t operate 24-hour help or claim lines, or others might place certain restrictions on specific aspects of the policy. If you need to have full liability coverage, for instance, this will make a huge difference when it comes to selecting a provider, and it’s certainly something to consider when you get quotes. A little bit of time spent researching different insurers and their policies will pay dividends in the long run. Peace of mind is absolutely essential when it comes to any sector of the construction industry, and manufacturer of warehouse insurance will play an important role in the running of the company. Obviously, the hope is that you’ll never have to call on your insurance company but, if you do, you need to know you’ve selected the best policy. You may want to talk to your insurance agent or broker about the type of business property insurance best suited for your small business.
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