BUSINESS INSURANCE

MEANING OF BUSINESS INSURANCE

Business insurance is a type of insurance policy that protects a business owner against financial losses. These loses may arise from various incidents which negatively affects the life, survival and operations of his business entity. And associated investments. It is also known as commercial insurance. Buying business insurance policy will help protect you against risks of theft, losses arising from accidents. Property damage, fire incidents, third party liability arising from lawsuits and others. Therefore, the main purpose of business insurance is to help provide coverage from business losses that may arise during the normal course of day to day running of the enterprise. If there is a happening of the event insured against and there is a claim, the insurance company will pay the policyholder the actual value of the damages or a replacement of the items.

Types of business insurance

There are many types of policy that a business owner can consider purchasing and some of them include;

Property insurance

Professional liability insurance

Product liability insurance

Home-based

Vehicle insurance

Business disruption insurance

Property insurance

This is the type that covers and properties of business such as equipment, furniture, inventories and even signage in the event of destruction by fire, theft, storm etc. however, it is noteworthy that this type does not cover personal properties of the business owner which are expensive. It further does not cover incidents of mass destruction of properties such as earthquakes and flood. Thus, it is advised that you take additional coverage if your business is located in an environment with high risk of earthquake and flood.

Professional Liability Insurance

This is the type that protects against the negligence as a result of omission or commission of the business owner. It is a liability arising from the failure to perform some business obligation or a mistake arising from performing such an obligation. It is therefore pertinent for business owners to look inward and ascertain the nature of professional negligence they are exposed to and insure themselves against its occurrence so as to mitigate the loss that may arise from it.

Product liability insurance

There are a lot of businesses that are involved in manufacturing of product and commodities. Sometimes, liabilities arise as a result of defects in the product manufactured by the business. This is the whole essence of product liability insurance in case of lawsuits due to damages arising from its products. This type of policy protects businesses in the event of such occurrence.

Home-based business insurance

As a result of the fact that homeowner’s insurance does not cover businesses operated at home, a business owner who operates at home will need business insurance to cover them, that is items such as inventories and equipment used in running the business.

Vehicle insurance

The importance of insuring all vehicles used in day to day operation of a business cannot be over emphasized. The lowest level of vehicle insurance for businesses is third party motor vehicle insurance against liabilities of third parties. However, it is advisable that business owners opt for the comprehensive coverage. The comprehensive coverage will cover third parties as well as employees’ vehicles when used in running the business.

Business disruption insurance

This is the type of business insurance policy that is usually ideal for businesses that make us of physical location to run their businesses. These types of ventures include businesses like manufacturing companies and retail stores. In this regard, business disruption insurance indemnifies the holder business in the event of disruption in the smooth running of the business.

Importance

1. It gives owners of holder businesses peace of mind.
2. It protects owners of business from financial and economic losses.
3. Your businesses are exposed to all manner of risks without business insurance.
4. It covers the cost of replacing damaged properties as a result of fire and other perils
5. It provides indemnity in the event of third party liability claims.
6. Without business insurance, owners of businesses stand the risks of paying heavily for damages to their businesses and third party liabilities out of their own pockets.
7. It also helps to protect the income of the business by helping to replace business income lost as a result of when it cannot operate due to some loss.
8. It equally provides financial coverage to employees who cannot work as a result of injuries sustained in the course of their employment

Conclusion

It is very imperative for owners of business to consider and properly evaluate the need for business insurance. This is because they may be open to more financial risk/exposure than they may imagine in the event of loss.

It is further advised that a business owner engage the services of a qualified, experienced and reputable insurance broker who will effectively analyze their business risks if they lack the capacity to do so.