Business owners have to take their time and analyse each type of insurance that they might need to invest in for the safety of their companies. Many businessmen consider that insurance may be irrelevant in some cases, but this affirmation is not true. The benefits of an insurance plan are long-term ones, so the immediate effect of this investment can be unnoticeable.
There are numerous cases in which businesses were saved by insurance plans entirely. All actions have consequences and it is recommended to prevent uncomfortable situations. Insurance plans give you the chance to do it. Here are the most popular types of insurance among business owners:
1 – General Liability Insurance
General liability insurance policies refer to the plans that cover damages in the eventuality that a company’s employees or products cause injuries of any kind to a third party.
This type of insurance is different from the professional liability insurance which will be discussed later in this article. General liability is required because it protects companies that are prone to allegedly cause bodily or property injuries from facing serious law consequences.
The businesses that should opt for general liability insurance are part of industries such as landscaping, IT, real estate, consulting and marketing. Some general liability insurance plans also cover claims that have to do with advertising.
Without investing in this type of insurance, companies have to pay for the claims on their own. Such an action could leave the company vulnerable, due to the high costs they need to pay. Most companies that found themselves in a similar situation reached bankruptcy in the coming years.
2 – Professional Liability Insurance
Some people know the professional liability insurance under the name of errors and omissions coverage plan. This is much different from the general liability insurance, as it refers to protecting a company from an employee or director’s own professional service.
If the decisions made by the employees of the company affected clients in any way, financially speaking, this liability insurance will cover the damage. It is called error and omissions because it refers both to mistakes made by employees and the failure to respect a deadline or to perform a certain service, which may result in a financial loss for a third party.
As in any other case of insurance, the professional liability plan does not include criminal prosecution cases. There are other liabilities that won’t be covered by such a plan, but it all depends on the insurance company policies, terms and conditions.
The most common claims that are resolved by professional liability insurance are cases of misrepresentation, inaccurate advice, and negligence in service. The companies that can benefit the most from such policies include tech, manufacturing, legal professionals and real estate.
3 – Commercial Property Insurance
Many companies are faced with a financial loss because they did not opt for commercial property insurance at the appropriate moment in their development. Unfortunate events that have to do with natural occurrences, theft or vandalism can’t be directly controlled by a business owner, and this is the reason why commercial property insurance is probably the most necessary plan from this list.
Investing in commercial property insurance plans could save companies from making huge investments in the future, that only lead them to financial distress. Some insurance companies include commercial property plans in business insurance packages, which means that company owners can spend less money for more coverage. It is important to compare business insurance plans before finally making a decision.
There are multiple factors that could affect the rate paid for commercial property insurance. The land value of the company, as well as how hazardous the products and services offered by the company represent two of the factors that influence the final rate paid for this type of insurance.
The age of the equipment used within the company is another important factor when trying to obtain a lower premium. Commercial property insurance is necessary for all businesses, from small to big.
If you don’t have enough knowledge in the field of insurance and finances, it would be best to consult an agent or a company that has plenty of experience in the field and could recommend the best plan for your firm’s requirements.
4 – Directors and Officers Insurance
Directors and Officers insurance, also known as D&O is the plan that covers the human assets of a company. For instance, if an employee, a competitor or a customer sues a director for wrongful acts that have to do with managing the business, the insurance plan will cover any costs involved in the process.
The insurance has two main benefits: it protects the assets of a company and it protects the company itself.
Most D&O plans cover all the legal fees generated by the said processes. The most common reasons why people sue directors or officers are a misuse of official financial resources, fraud, not respecting workplace laws and intellectual property theft.
D&O plans are usually selected by public companies, but they can be selected by all sorts of businesses, from NGOs to private firms.
5 – Vehicle Insurance
Company-owned vehicles require a specific type of insurance, which are different from commercial auto insurance. Auto insurance plans are separated into classes, depending on several aspects of the business (how much time is spent driving the vehicles, how many vehicles are insured, who drives the vehicles etc.).
Finding the best vehicle insurance plan depends on comparing the offers of all potential insurers. This will help business owners select the auto insurance policy that has the best coverage and premium.