Compelling Reasons for Purchasing Business Insurance
Business insurance protects businesses’ investment by covering financial risks that are associated with unforeseen events that businesses may face in future. As a business owner, it is, therefore, sensible to purchase a comprehensive insurance cover to protect your business. There are compelling reasons that make you buy business insurance- it covers the financial risk, risks of natural calamities, and liabilities because of product, public and professional indemnity. We would discuss these benefits in this article.
Businesses in general are prone to financial risks. These my come in the form of loss of capital invested, interruption in business, compulsory closure of business and so on. At these points of time, you need finances to recover from the loss. Business insurances would come to your risk under the circumstances by offering financial compensation to your business according to its need.
Your business may face situation when they need to shut down because of the recessionary conditions in the market and your business can not sustain. For this, reason you need to shut your business temporarily. Business insurance covers such risk. Likewise, it covers
Covers risk of closure due to different reasons
Businesses are prone to risk of damage resulting in temporary closure of business because of :
- Natural disasters – Floods, fires, hurricanes and tornadoes.
- Man-made – Risk of fire, theft, employee misbehavior, illegal intruders’ violence resulting in property damage.
Provides liability coverage
Your business is prone to risks of liability- general liability, product liability, professional indemnity, There are many types of insurance coverages for businesses from which businesses can choose required type of insurance based on their needs.
- General liability: General liability insurance covers risk of damage or injury that your company might cause to other people or property. This cover is more important for you if someone claims for serious injuries that could easily wipe you out. General insurance covers this under public liability.
- Product liability insurance: Product liability insurance covers the risk of claims of compensation from consumers who found the product to be having defects and might sue your business. Whether you manufacture, distribute and retail the product this insurance covers the expenses involved in paying financial compensation as awarded by courts/tribunal/forum.
- Professional indemnity insurance: Professional indemnity insurance covers the risk of litigation from their clients. Professionals such as architects, doctors, chartered accountants, engineers, software professionals and the like. Such professionals face the risk of liability because of negligence, malpractice or misrepresentation claims, divulging confidential data etc. The risk of such litigation come from their clients.
All the points discussed form compelling reasons to purchase business insurance cover, given the risk of different sorts your business faces.
To purchase, research thoroughly check out for reputed business insurance brokerage firms. Negotiate for a coverage according to your risk profile and size of the your business and chalk out an optimal coverage for your business.