Negosentro.com | Does Your Business Need Insurance? | Insurance works by bridging the interests of two parties—the insurer who offers risk management, and the policyholder who compensates the insurer for the risk that they take, in the form of insurance premiums. Generally, in the business context, insurance policies protect the insured against the risks of financial loss that may occur in the event of damage to themselves or their property or from liability for injury caused to a third party.
A few typical examples where insurance can help protect a business include instances of damage to property in the event of fires, thefts, natural disasters, etc.
Types of Insurance Policies
There are many different types of insurance policies, with some firms offering boutique services while some others provide more comprehensive services. The most common categories of insurance services cover areas such as finance, medical, property, and a few more.
While accident and health insurance will cover the medical costs of staff or visitors who have suffered some form of physical injury or other distress on your premises, property insurance cover will extend only to incidents of non-physical liability such as lawsuits and damage to personal assets.
Businesses may require special types of insurance that insure against specific types of risks that are common in their particular field. For example, an auto dealer may require coverage for damage that could occur during test drives. For complete coverage, however, it is a good idea to take out a general liability insurance policy.
Does Your Business Need Insurance?
While product-oriented businesses may have more obvious assets to protect, do not make the mistake of thinking that a service-oriented business faces no risks. For many service providers, there are three main risks to protect against:
Malpractice
When clients act on your advice or receive care, and things go, you may find yourself at the wrong end of a malpractice suit. These can be expensive in terms of both legal costs as well as the costs of compensation should you lose your case.
Injury
Did you know that you may be held liable for injuries suffered by visitors to your business premises? While the degree of liability will differ based on the circumstances of each case, the best practice is to eliminate all risk by taking out an insurance policy to cover these situations.
Wrongdoing by staff
It might be a surprise to learn that an employer is, in many cases, exposed to a great deal of liability for the wrongful acts of their employees. For example, suppose a company driver gets into an accident while on duty and is found liable. If this is the case, then there is a chance that this liability will be vicariously passed on to you.
To safeguard your business interests, you should consider speaking with a reputable insurance company like Meslee Insurance.
How Insurance Works:
Premiums
This is the price that is paid in exchange for protection against perils. It is usually expressed as a monthly cost and is determined by the insurer using your risk profile.
Deductibles:
The specific amount a policyholder must contribute to cover the costs of a particular claim. This serves to deter policyholders from making frequent, insignificant claims. Deductibles usually apply per policy or per claim.
Policy Limit
This refers to the maximum amount that an insurer is willing to pay under a policy for a covered loss. This limit may be set per period, e.g. annually, per loss or injury, or for the lifetime of the policy. Higher limits typically carry higher premiums.
