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What to Consider When Creating a Business Insurance Policy
Author David Schneider | Aug 29,2007
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The first thing that you should understand about business insurance is that there is no one perfect policy that will provide the right combination of protective clauses for every business. This is because every business faces a unique set of hazards and risks, and these unique conditions must be addressed with the right collection of business insurance policies and supplements. If you are ready to create a business insurance policy for your company, then you will want to look at what is legally required, what business activities your company engages in, what coverage your employees need, what natural hazards your business faces and what manmade hazards your business faces.
What is Required by Law
The first thing that you will want to consider when creating a business insurance policy is what policies or coverage is required by law. If you own a small business with no employees, then chances are you will only need liability insurance. However, if you own a business that has employees, then you will generally need to have liability insurance, unemployment insurance and worker's compensation insurance.
What Types of Business Activities Does Your Company Engage In
The type of business activities that your company engages in is going to impact what types of business insurance you need. If you produce consumer goods like food, clothing, toys, or electronics, then you may want a more comprehensive liability insurance policy in case one of your food products causes someone to become ill or if one of your products malfunctions and causes an injury. On the other hand, if you offer services instead of products, then you want a liability policy that will protect you in the event that you are sued because your services were unsatisfactory or if you caused damage to your customer's property.
What Does Your Payroll Look Like
Having employees is also going to impact the types of business insurance coverage you will need. You will need to have unemployment and worker's compensation insurance if you have employees. However, you may also want to offer your employees the option of enrolling in a group health insurance program, a life insurance program or a disability insurance program.
What Natural Hazards Is Your Business Exposed To
You may think that your property insurance is going to cover your business in the event of a natural disaster. However, most general property insurance policies don't cover natural disasters. If you think that your business may be exposed to natural disasters like floods, hurricanes, tornadoes or other natural hazards, then you will want to look into flood insurance and disaster insurance policies and supplements.
What Manmade Hazards Is Your Business Exposed To
Manmade hazards also need to be taken into consideration when creating a business insurance policy. Manmade hazards include: chemical spills, arson, theft, property damage and vandalism. Most businesses are vulnerable to a variety of manmade hazards. Evaluate your business insurance coverage options to make sure that your business is covered in case you are robbed or in case your business property is damaged because of another manmade hazard. |
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