It may be true that insurance is not the most glamorous of industries, but it is essential to the success of other businesses and industries. The thing is that an entrepreneur interested in starting a business needs to come to terms with a certain amount of risk. They not only need to understand that risk, but they also need to take steps to mitigate it, as it goes a long way in reducing the cost of borrowing start-up capital and improving the business’s chances of success.
Enjoy the Diversity
Luckily, you can now find insurance coverage for every possible risk your small/large business might face. Of course, there will be some difference in amount and cost of coverage of policies, but you will always be able to find a suitable cover for your business. In order to make a correct decision, you should first educate yourself about the types of business insurance coverage available today. For instance, you can divide insurance for businesses in three categories – property and buildings, liabilities, and business assets and equipment (also known as office contents insurance).
Common Types of Business Insurance
It implies the fact that though different types of insurance for businesses is now available in the market, but they will always fall in one of three categories – they may be related to liabilities (product, employers and public liability insurance), office content, or property. More about the types of these business insurance policies is discussed below.
• Product liability insurance saves you from dealing with any damages resulting from the use of a defective product you manufactured in your company. Every product, from machine tools to software, comes with a potential to cause damage or injury to other businesses or the public in general; however, product liability insurance will save your business in case something goes wrong.
• Commercial property insurance saves you from recovering the loss and damage of your company’s property due to events, such as smoke, fire, hailstorms, wind, vandalism, civil disobedience, and so on. Depending on your insurance contract and terms, this type of business insurance may also cover any income lost due to business interruption.
• Home-based business insurance is what saves you from coping with any expenses incurred due to a damage done to your home-based business. What you should bear in mind is that even if you have your business established in your backyard, your homeowners’ insurance policy is not going to cover home-based business losses. However, you may consider adding riders to your homeowners’ policy or opt for new business insurance to mitigate the risks involved in running a business.
• Key Man Cover is another form of business insurance, which may not be offered by every insurance company but is a good choice for small firms that depend heavily on a few key people. In case something goes wrong, the policy will offer short-term financial help to keep the impact low.
• Goods in Transit insurance is yet another option that covers your goods against any damage or loss when sent by a carrier. Many small businesses take advantage of this particular type of business insurance if their business involves dealing with delicate items.
• Contents insurance is a comprehensive way of covering your business assets and equipment. The interesting thing is that insurance companies allow you to insure your business equipment and plant on an ‘indemnity’ basis or a ‘replacement as new’ basis.