If you have just started a new business venture of your own or if you have been asked to look at the insurance renewals of the company you are working for, business insurance can feel like a daunting proposition. If you are not used to it, the language and the jargon can appear completely alien.
There is also the task of knowing what sort of coverage you get. With the plethora of services on offer, a new businessman can be confused. If you break it down, however, business insurance is fairly easy to understand.
There are basically two types on risks that a company may face during its daily operations. These are property risks and liability risks. All business insurance policies deal with elements of these two risks either separately or together. If you need cover for buildings, material, etc. you will need property insurance and for the work that you do, liability insurance is required. Most businesses require a combination of both.
Business property insurance protects all possible risks to the premises including material damage and damage to all buildings, fixtures, outbuildings, fittings, etc. The premium is usually calculated using the cost involved in rebuilding the property. It might also include certain elements of public liability to protect the business, for example, protection against a wall collapsing on a passerby. Property insurance has various subtypes which are marked by the specific type of property covered, like shop insurance, hotel insurance, pub insurance, etc.
To protect physical elements inside a building, property content insurance is used. It covers loss or damage to items like furniture, machinery, stock, computer equipment, raw materials, telecommunication equipment, etc. For items away from the premises, freight or cargo insurance may be used. Certain policies also provide specialist cover to landlords who have rented or leased out their property.
Liability insurance protects against all liabilities the business might encounter as it carries out its day to day actions. Liabilities are events which could cause claims to be filed against the owner, proprietor or company. Most companies have, among others; public liability policies which protects the profits of the company from claims by members of the general public. This system of cover forms the basis of a general insurance contract.
There are other forms of liability insurance as well, like employee liability, which protects your firm against any claims arising due to an accident to any paid employee or subcontractor while at work. If you sell goods to other entities, you will need product liability insurance, which is usually included in a shop insurance policy.
The owners of the company can also purchase directors and officers insurance which provides cover from any civil or criminal charges arising out of the activities of the business.
Most of the insurance policies sold to businesses are in the form of a package which combines various different insurance offerings. The cover provided is usually tailor made for specific sectors. Conduct proper research and choose one that suits your needs.
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