I have a business in Petaluma – Do I need insurance?
It is important for every business to carry sufficient business insurance to protect it from the many issues that can arise that are outside the business’ control. The precise kinds of business insurance that a company needs will depend on the nature of the company’s activities and other factors. Failure to have adequate insurance protection could put a business at risk of facing severe financial payouts, and might even result in the company going out of business. This article looks at some types of insurance designed to protect commercial operations.
Many Varieties of Commercial Insurance
Commercial insurance is a general term that refers to insurance policies that are precisely tailored to meet the demands of commercial operations. It should be mentioned that even a sole trader who trades informally may have to have some form of commercial insurance to avoid issues with the law, or with dissatisfied customers. For example, a window cleaner who uses a motor vehicle to travel to, from and between jobs may be required to have commercial insurance for that vehicle.
Although commercial insurance is an essential protective measure for all sizes of companies, in many ways it is even more critical for smaller firms with limited resources. The private assets of owners and directors of smaller businesses are often less protected than those of big business owners, making it even more important to have the right level of insurance coverage.
Worker’s Compensation Insurance
Worker’s compensation insurance is a specific type of coverage designed to help both employers and their employees. Many accidents occur in the workplace, and where these result in injury to any employee, the staff member can apply for redress from the employer’s insurance provider.
For workers, it is important to appreciate that claiming from the compensation insurance provider is not equivalent to taking a lawsuit against either the employer or the insurance issuer. In fact, the scheme is designed to pay compensation without resorting to the courts, and employees who make claims under the scheme must give up their right to sue.
This type of insurance benefits employers by protecting them from costly lawsuits, which often result in very high payouts. It also helps to get the issues resolved much more quickly. The most typical claims under the scheme are for loss of earnings, and the repayment of medical expenses.
Employment Practice Liability Insurance
The coverage provided under employee practice liability insurance (EPLI) protects a company when issues arise that affect the employment process, certain types of work environment factors, and the termination process. Employers require this coverage to protect themselves from claims made by job candidates, existing staff, and past employees.
The kinds of claims that are most commonly taken are those arising from the following issues:
- sexual discrimination or harassment
- racial or religious discrimination
- wrongful termination of employment
All employees of a business, as well as the directors and other executive officers, are protected under EPLI policies.
Commercial Property Insurance
Commercial property insurance is often a part of, but not the same as, commercial insurance. It is a type of insurance that applies specifically to the actual physical property that a firm owns or leases. This includes land, buildings, machinery and other items. The most frequent claims received under commercial property insurance policies are associated with fire, theft and natural disasters. In some instances, equipment is covered separately from buildings with a commercial contents insurance policy.
Company owners should be careful to scrutinize the policy carefully to make sure there is sufficient protection. Every policy will differ in its specifics, but there are some general issues that need to be taken into account. For example, some policies can provide for replacement of damaged or stolen machinery, or other company equipment. Others will offer financial compensation based on the current value of the property being claimed for.
Many business owners need this coverage to allow them carry on trading with the smallest delay following a loss. Therefore, it is probably best to seek a policy that offers replacement rather than one that provides for just the value (depreciation will be taken into account) of property.
Clearly, the cost of a commercial property insurance policy will depend on the level of coverage required, and expensive policies could prove difficult to finance in some businesses. Having said that, if a Petaluma local business is hit by any disaster that means it cannot trade until the missing or damaged property has been replaced, it is probably best to spend the extra money on an insurance policy that will let them get back in business as quickly as possible.
General Liability Insurance
General liability insurance protects firms from a wide range of liabilities. Specifically, it provides coverage to companies when third parties look for compensation due to injuries or damages caused by a company, its products, or by the negligence of its workers.
For example, a general liability insurance policy for a retail outlet will protect the business from claims by customers who were injured while on the premises.
It will furthermore protect the Petaluma company against claims that a product it sold caused damage to property or injuries to people through a basic design flaw or a malfunction. The retail outlet may be able to apply for redress from the product manufacturer. Nothwithstanding that, in most jurisdictions, the outlet will be the entity that is sued by the complainant, which is why this type of coverage is essential.
General liability insurance normally provides coverage for legal expenses incurred in any lawsuit, medical expenses, and substantial damages or injury payouts.
Business entities are obliged by law to have certain types of insurance policies. For example, it is a legal requirement to carry insurance on commercial vehicles. Other kinds of insurance coverage are voluntary, but it is unwise to decide to trade without proper coverage.
Insurance policies can be complex, and some enterprise owners may be unsure of whether or not they are fully protected for all possible scenarios. If that is the case, they could consult with an independent, experienced and licensed broker. Brokers are offered commission by insurance bodies, and they fund that commission out of their profits, so there is no extra cost to a business that uses a broker to arrange business insurance.