Every business owner needs commercial insurance of some kind or other. It is definitely classed as one of the most vital purchases for any business. Commercial insurance protects the business and its stock holders against a wide variety of events such as theft, damage to property and liability lawsuits. Any business without commercial insurance is asking for trouble.
The most frequently used types of commercial insurance are property, liability and worker’s compensation.
Property insurance is there to cover the cost of repairing damages to the physical property of the business such as buildings. It can also include coverage for things like machinery (for accidental breakdowns of machinery), debris removal (should your property be hit by an act of God that leaves a huge mess to clean up), builder’s risk (in case damage is caused while construction is taking place), glass (all windows etc), inland marine (for property in transit or other people’s property that is store on your land), business interruption (for recovering lost income and paying expenses while business is unable to continue), ordinance (if you have to tear down a building that is not compliant and then rebuild it), tenant (covers damages to improvements made that were caused by employees), crime (for criminal activity, obviously) and fidelity bonds (losses due to theft by a bonded employee) insurances.
Should you or your business cause injury to a third party, you need liability insurance to cover the expenses laid on you by a lawsuit. This commercial insurance includes errors and omissions (inadvertent mistakes that cause injury), malpractice (damages caused by a professional failing to adhere to the professional standard of conduct), car (for all automobiles used by the business) and directors or officers (for lawsuits directed at representatives of the company) insurances.
If you have any employees involved in the day to day running of your business, especially if the business has a high risk of injury to its employees, the it is a good idea to take out worker’s compensation insurance. This type of commercial insurance covers the expenses incurred by an employee getting hurt through a work related incident. It may also protect you against a law suit by said employee since they will be receiving compensation for their injuries.
When a business owner is looking to start up a new business, the first thing they should do after drawing up the business plan and scouting property is investigate commercial insurance. There is no telling how soon they will need it. However, they also need to bear in mind that a new business is a high risk for insurance companies and so they will get a higher premium than a similar business that has been in operation for years. This means that they should review their policy every year and try to work it down as low as they can. Every good business person is about making the most profit that they can after all and unnecessarily high commercial insurance premiums cut into profits in a big way, but then, so do lawsuits.