Insurance: Your Bridge Over Troubled Waters
Something like 80% of all small businesses are not insured as well as they should be. Recent disasters like the
Of course some types of insurance are mandatory in most jurisdictions - workers' compensation and vehicle third party liability insurance are two of these. The exact kinds of insurance you need will depend on your type of business, and it’s true to say that no two businesses are exactly the same. Here are some of the more common, and useful, types of insurance cover you can take out.
- Business Interruption - expenses incurred if the business is interrupted by fire or other natural events. A business may be forced to close for any number of reasons including a power failure, a fire to a neighbouring business, a war or even the failure of a key supplier. Having business interruption insurance can save a business allowing it to continue covering costs such as salaries, utilities and rent, as well as lost profits, until the business reopens.
- Crime Coverage - covers the theft, disappearance or malicious damage of company assets
- Directors' and Officers' Liability - indemnifies officers and directors of the company for legal expenses and court costs incurred as a result of acting on behalf of the company
- Employment Practices Liability - covers lawsuits brought by employees for such things as sexual harassment and wrongful termination
- Errors and Omissions - covers claims for commercial malpractice and for errors and omissions in providing services
- Health and Medical - covers health and medical needs for employees and their dependents
- ‘Key Man’ Life Insurance - a life insurance policy payable on the death of a key employee. This can include the owners of the business.
- Liability - liability for injuries to people or property caused by your company or by the actions or negligence of its employees
- Motor Vehicle - liability for injuries caused by your company’s vehicles and by your employees’ vehicles when used for business purposes
- Product Liability – liability in the event that an item manufactured or developed by your company is responsible for an accident, injury or death. There can always be a significant risk of injury from manufactured products. Safety measures and precautions taken in producing the product and explaining its use are factored in when determining your premium.
- Professional Liability - protects professionals from claims made against them personally for errors made while they are performing their services
- Property Damage - damage to your business property due to fire, wind, explosion, accidents, robbery or theft
- Website - covers various claims such as libel, copyright infringement and damages to computers and data as a result of vandalism and viruses
- Workers' Compensation - covers injuries to employees for work related matters
This list is extensive but by no means comprehensive. Check your existing coverage against the list to make sure you have everything you need. You should also check the fine print in your existing policies thoroughly to be certain they actually provide the level of cover you need them to.
Many businesses carry ‘umbrella’ insurance packages that supposedly cover all the basic SME insurance needs. However, you should read the fine print carefully to make sure there are no gaps where your business specifically needs coverage. Also be sure to ask about the scope of the coverage, exclusions from coverage and the policy's deductible amounts. Insurance isn’t worth a cent if it doesn't provide the cover you need when you need it.
SOURCE NOTE: RAN One
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Business Roadmap provides practical business advice for small to medium sized businesses that are trying to overcome problems, or are trying to achieve their vision and full potential. Visit the Business Roadmap website for further information.
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