Which insurance policies are necessary for business

There is an insurance policy that covers almost every conceivable risk a business could face. From the most basic of general liability insurance to the most complex of specially structured policies to cover unique business risks, it is all there. Getting insurance is not the problem. But because insurance can be an expensive proposition, deciding what types of coverage your business needs and what is non-essential or what you can do without is important. The cost of coverage and the specifics of a policy will vary from insurer to insurer. The best thing to do is to discuss the nature of your business and the risks associated with it with your insurance professional. He/she will be able to advise you on the most cost effective insurance solutions for your business. Having said that, there are a few basic types of coverage that no business can do without. *. General Liability Insurance: As the name suggests, this type of policy is designed to protect a business from claims raised against it by those claiming to have suffered accidents, injuries and other loss due to acts of negligence on the part of the business. In general this kind of policy will protect you against damages incurred because of bodily injury, medical expenses, damage to property, the cost of defending lawsuits, settlement bonds etc. as may be required during a legal appeal procedure and libel and slander. *. Product Liability Insurance: In general, businesses that manufacture, distribute and sell a product are responsible for it being safe to use. If there is a defect or flaw in the product that has caused injury or loss, the business may be held liable and be responsible for paying out compensation to those users who have suffered the loss or injury. Product liability insurance protects against this kind of financial loss. The amount of insurance required will depend on the products in question. For example, a business dealing in shirts has less risk of liability claims as compared to one dealing with chainsaws. *. Professional Liability Insurance: This is the equivalent of product liability for businesses that provide services instead of products. This type of insurance protects a business against claims relating to malpractice, negligence, errors and omissions (this insurance is also known as Errors and Omissions Insurance) in the service provided to customers. In many cases it is mandatory for a business or professional to have such coverage. For example, doctors are required in many states to have malpractice insurance before they are allowed to open a practice. *. Commercial Property Insurance: Every business has a physical existence - a working area (large or small), equipment in form of computers, phones, vehicles etc. and other things. These involve a major investment and need to be protected against damage and loss. Fires, floods, riots and other kinds of disasters can not only cause serious financial loss but also affect the income of the business as the operations will be affected by the loss of property. There are two types of commercial property insurance. The first is the All Risk Policy that covers a wide range of risks as noted in the policy terms. These policies cover all the typical risks that the normal business is subject to. The other type of policy is the Peril Specific Policy that covers risks that are specific to a certain type of business. Discussing your business activities and operational issues with an insurance professional will provide the inputs that are needed to decide on which type of policy or combination of policies is right for your business. Every business, from the small home office to a large Fortune 500 company, needs insurance. But each business has its own individual needs. Insurance is a complex subject and making the wrong choices is easy. Spending time on studying the issues and options involved and discussing your needs with an insurance broker will provide your business with the insurance coverage it requires at the cost you can afford.