Understanding the types of insurance for businesses

Liability Insurance

A business is usually engaged in selling goods and services as also repairing of goods. The goods in the course of supply or delivery may cause damage or injury giving rise to claims by the affected party against the business. The claim may also be due to the failure of the sold product. This is called product liability and a product liability insurance policy protects the business owners against claim of loss or injury or failure caused to another party or business by the products of the company. Often there is claim of negligence against a business where a third party holds the business liable for causing financial loss by way of damage to property, injury or death by negligence. The business in this situation of financial risk gets protected if covered under public liability insurance. Businesses doing advisory services may be sued by clients for reasons of their suffering financial, physical or material loss resulting from such advices tantamount to negligent services. The professional indemnity insurance by providing cover of indemnity protects the business owner from the losses arising from such legal actions.

Assets & Revenue Insurance

The assets of a business and its ability to generate revenue can be protected by certain types of business insurances. The office building and inventory of a business can be damaged by fire and other natural calamities and terrorist activities. The building and contents insurance covers such perils. Burglary insurance provides cover against theft. This kind of cover is very essential for small businesses that cannot maintain round the clock security of business premises. Then there are situations of interruptions in business due to fire, catastrophes, terrorism like the 9/11 incident that halts operation of a business. The business interruption insurance takes care of the expenses incurred during the period of closure of the business and also provides for cash flow to maintain the income that could have been earned in that period. This insurance thus prevents the loss of income for the business. There are various other assets and revenue insurances like machinery breakdown insurance to cover against electrical and mechanical breakdown of plant and machinery at the business site, fidelity guarantee insurance as cover for any embezzlement or misappropriation of funds by any employee and motor vehicle insurance. Of these the motor vehicle insurance is the most important since all businesses have to compulsorily insure company vehicles to protect against the potential liability arising out of injury to third party that a company vehicle can cause. Motor vehicle insurance can again be of different types depending on circumstances like theft of the car or damage in fire, causing damage or injury to third party or comprehensive insurance to cover all these.

People Insurance

People insurance basically refers to insurance cover for the business owner and the people employed by the business. The Workers Compensation insurance from an approved insurance company is meant for protecting the employees against any ailments or accidents. Workers compensation however does not cover self-employed businesspersons who have to take personal accident and illness insurance from a private insurance company.