Insurance is of great importance as it helps to bring back the business to it’s normal operating form in case it losses property and stock due to fire or other disasters. Some form of insurance can protect the company against losses.This protects the welfare of the employees and customers
Running a business is a challenge, and it often involves putting your own finances at risk. It makes sense to manage risk, reduce uncertainty and protect your livelihood.
Business insurance can protect the equipment and machinery you need to stay in business. It can ensure that you, your employees and any members of the public with whom you interact in your business are protected from the risk you face as a business owner.
And it may also provide financial support if your business is unable to operate following an unexpected event such as a fire or natural disaster.
Think about how you would manage if your stock, equipment, or even your premises were badly damaged or destroyed. Would you be able to continue running your business? Would you be able to recover from the financial loss?
Insurance companies provide a variety of policies that cover small businesses, tradespeople, professionals, hospitality operators and more.
Different types of business require different policies to protect company assets and to protect against legal liabilities. Make sure you know what kind of insurance you need for your business.
Common types of business insurance focus on assets and revenue, liabilities, and personnel. These include:
| Professional indemnity/liability | Protects you from legal action taken against you if someone suffers a loss after following your professional advice or as a result of your receiving your service. |
| Property | Covers damage or loss to buildings, contents and stock caused by insured events and accidental damage |
| Public liability | Covers your business for legal costs and compensation costs that you might have to pay if you are found liable to someone because you caused death or injury, loss or damage to their property, or economic loss due to your negligence |
| Property | Covers damage or loss to buildings, contents and stock caused by insured events and accidental damage |
| Product liability | Businesses that supply, deliver or sell goods, even in the form of services or repairs, may need cover against claims of goods causing damage, injury or death. Product liability cover protects you if any of these events happen to another person or business by the failure of a product you are selling |
| Theft and burglary | Theft insurance generally covers your business against loss or damage to your stock and contents if someone forces their way onto your premises, or uses deception to get in to your premises. It usually does not cover cash losses, which can be covered separately |
Sourced from: http://understandinsurance.com.au/types-of-insurance/business-insurance
In some cases some kind of insurance are a legal requirement. It is good for a business owner to be prepared incase of a disaster,the insurance can refund all the sales lost due to the disaster.
Even if you have a successful business, disaster could strike at any moment and force you to shut your doors. Companies typically carry insurance to mitigate the risk of unforeseen damage. Although it might seem tempting to cut costs by forgoing insurance, business experts like the Small Business Administration (SBA) highly recommend maintaining a business insurance policy.
Considerations
You need business insurance to cover acts of God and general liability, such as malpractice. A patient, for example, might sue a doctor’s practice if the nurse accidentally gives him the wrong medication. If you have a business in a flood zone, a flood could destroy your business property and allow competition to move into your market while you rebuild.
Legal Requirement
States often require certain types of business insurance. If you have employees you must purchase worker’s compensation coverage through the state or a commercial provider, according to the SBA. Six states require businesses to carry disability insurance, but companies in states that do not require insurance commonly offer it as a benefit.
Benefits
While property insurance covers the damage to any business, even if you run a home business, it does not reimburse you for lost profits. Business interruption insurance pays you for lost sales until you get your business up and running again after a disaster. If you become disabled or too ill to run your company, disability insurance provides a percentage of your income. Additional insurance for overhead provides for expenses, such as supplies and inventory, needed to run your business while you are disabled.
Expert Insight
You should not rely on liability waivers to protect yourself in case of malpractice or accidents because they usually never cover you completely, according to business attorney Nina Kaufman. In some states, you cannot use waivers at all to protect a business from liability.
Tip
Try to purchase all of your business insurance from a single company. Business owner’s policies cover the most common types of insurance needed by a business. When starting a business do a risk-management audit to identify potential liabilities and what an accident might cost. Do this risk management analysis every year. Always select with a licensed agent familiar with the risks associated with your type of company.
Sourced from: http://smallbusiness.chron.com/business-insurance-important-2948.html