Business Insurance From Insurance By Steve

Analyzing The Risks To A Business

Running a business of any kind involves assessing risks and rewards. Will an investment pay off? Are the staff being hired to right ones? Is there sufficient demand for the products and services the business is offering?

Similarly with business and commercial insurance, the level of cover deemed necessary has to be enough to protect the business from catastrophe and yet at the same time not be wasteful covering events that are neither relevant or of little impact.

Each aspect of business insurance needs to be scrutinized to see if it's really worth the premium. Are there specific exclusions to your line of business activities that render the insurance policy ineffective? Insurers often tailor a policy towards particular trades and professions so these should be taken advantage of if they offer best value for your money.

Applying for business insurance requires a fair amount of preparation beforehand. The insurer will want all of the details regarding the locations and property used by your business, information regarding leases, fire prevention, construction materials and security devices. Information on your employees and commercial vehicles will be required as will bank account statements and financial statements and balance sheets. If you have specific equipment that needs additional insurance then the value, serial numbers, make and model of this equipment will also be needed.

Typical Business Insurance Benefits

A business insurance policy will often be tailored to your type of business. Common things covered by a policy are listed below.

Property - Cover for damage to business property from uncontrollable events such as fire, lightning, earthquake, explosions, floods and riots.

3rd Party Public Liability - Injuries that occur to customers and other visitors whilst on your premises or as a result of your work activities on a site.

Employee's Compensation Cover - Pay outs to employees for work related to injuries and fatalities that take place on your premises or as a result of their work commitments.

Machinery - Accidental damage to plant and equipment that could not have been prevented beforehand.

Debris - Removal of debris following an incident such as a fire or collapse of buildings.

Construction - Cover for damage that takes place during the construction or reconstruction of a commercial building.

Glass - Accidental window breakages.

Goods In Transit - Damage to goods whilst in transit.

Business Interruption - Loss of business revenue for the period following an event such as fire that has prevented the business from operating on a commercial basis.

Local Ordinances - Rebuilding costs associated with meeting local building regulations.

Tenant's Insurance - Insurance required for commercial lease of property.

Crime - Insurance cover for the theft of goods, tools and equipment.

Exclusions - Could be varied. May include damage caused by radiation, war, terrorism, government action, hazardous chemicals, computer viruses, vacant premises,

Commercial Vehicle Insurance - Motor insurance for vehicles specifically used for the operation of the commercial business.

Professional Indemnity - Insurance cover against claims made by your customer's for unsatisfactory work or claims for costs they have incurred as a result of your commercial activities. This would include errors, omissions or negligence made within your business that affect customers.

Payment Insurance - Insurance against late or non-payment of customer invoices.

Landlord's Insurance - Insurance cover designed specifically for landlords and residential lettings.

One area that a small or startup business needs to consider is the dividing line between the facilities used for personal use and commercial use. Is your business home based? Do customers visit your home? Is your vehicle used for both personal and business trips? Most personal home insurance and motor insurance policies exclude cover for business usage.

Another aspect to consider is whether you work in foreign countries or offshore dominions. Does the insurance policy cover your services, equipment and vehicles if your business is in the USA but you work on site in Canada or Mexico?

Trade associations will often have packaged together a suitable insurance policy for that particular trade or profession. Business insurance is necessary to protect yourself and your customers from claims that could lead in themselves to business failure.