Business Insurance and Your Business

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Business Insurance and Your Business

Good business insurance coverage can cover you for potential business risks. What type of
coverage can a business get?

According to the US Small Business Alliance(SBA):

General Liability Insurance

Business owners purchase general liability insurance to cover legal hassles due to accident,
injuries and claims of negligence. These policies protect against payments as the result of
bodily injury, property damage, medical expenses, libel, slander, the cost of defending
lawsuits, and settlement bonds or judgments required during an appeal procedure.
Product Liability Insurance

Companies that manufacture, wholesale, distribute, and retail a product may be liable for its
safety. Product liability insurance protects against financial loss as a result of a defect
product that causes injury or bodily harm. The amount of insurance you should purchase
depends on the products you sell or manufacture. A clothing store would have far less risk
than a small appliance store, for example.
Professional Liability Insurance

Business owners providing services should consider having professional liability insurance
(also known as errors and omissions insurance). This type of liability coverage protects your
business against malpractice, errors, and negligence in provision of services to your
customers. Depending on your profession, you may be required by your state government to
carry such a policy. For example, physicians are required to purchase malpractice insurance
as a condition of practicing in certain states.
Commercial Property Insurance

Property insurance covers everything related to the loss and damage of company property
due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience
and vandalism. The definition of "property" is broad, and includes lost income, business
interruption, buildings, computers, company papers and money.

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Insurance is based on the concept of loss due to uncertainty. Insurance is filled with

An insurer, or insurance carrier, is a company that sells insurance; the insured, or
policyholder, is the person or business buying the insurance. The amount to be charged for
insurance coverage is called the premium. As a result of insurance, the practice of risk

management has developed over time. The strategies to manage risk involve transferring the
risk to another party, like an insurer avoiding the risk, reducing the negative effect of the risk,
or even accepting the consequences of a risk. Actuaries are people who deal with the
financial side of risk and uncertainty. Actuaries use a lot of mathematical modeling.
Complexity is part of life, and insurance mirrors that. Your best bet is to call an independent
insurance agent to cut through all the complexity.

It's impossible to avoid risk. Risk and reward are part of life. The key to it all, however, is to
protect yourself from the perils of life. Financial loss can financially devastate an individual,
much less a business. Owing to inflation, losing everything in a calamity costs at least three
times more to replace and bounce back from. If a business doesn't have coverage, it can
collapse because of having to stay closed. In a way, its kind of like losing one's job and not
having another source of income. Getting business insurance however, can help to protect
your business.

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