Thursday, January 26, 2012

Types of Business Insurance

Insurance is a necessary part of running a successful business. Much like auto insurance covers mishaps that would otherwise be cost prohibitive, business insurance allows a company owner to operate with peace of mind.

There is more than one type of insurance that a business might carry, and some carry several, depending on the level of protection each needs to have. Some types of insurance are quite rare, but keep in mind that literally anything that can be lost, that has financial or other value, can be insured.

The most basic type of business insurance is general liability. This is a broad type of coverage that includes things such as medical expenses, the cost of lawsuits, or negligence of some kind. If claims of this sort are a regular occurrence, often insurance specific to the need will be purchased, while general liability is designed to cover things as an umbrella policy.

Product liability insurance is designed particularly for places that carry retail products. In most cases, the merchandise in a retail store is not actually owned by the store, but is simply resold by it. The store resells merchandise for the manufacturer, and the situation of selling merchandise owned by another entity is far more complicated and legally delicate than selling one's own goods, and calls for a specific type of insurance. If something is stolen or damaged, a business would be liable, and insurance protects against the potential loss.

A third type of business insurance is insurance tailored specifically for home-based companies. Home owners' insurance usually only covers losses directly related to a home. However, because the home will most likely have some overlap in resources (physical space etc.), insurance designed directly for home based businesses is appropriate.

Online business insurance is commonly carried by web-based companies. In today's information age, it is possible for a business to operate entirely without any sort of tangible product or physical interaction between client and producer. Furthermore, the nature of the internet makes it very easy for intellectual property to be stolen, copied or otherwise pirated, and security breaches via hacking, phishing and other methods are common. Internet business insurance covers such things as infringement of intellectual property such as meta tags (attributes of a website not usually seen by humans, but important for search engines), and copyrighted material.

Workman's compensation insurance is important to protect an employer against lawsuits that may occur if a worker is injured on the job, and to protect workers. If someone is injured in the line of duty, workers' compensation will usually pay for medical expenses and time lost from the job.

By: Michael K
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