If you are a new business owner, you might be wondering what commercial insurance is and if you really need it.
We all know that to run a business successfully, it takes a lot of time, energy and money therefore, you need to make sure you protect your investment.
Commercial insurance, ideally known as business insurance, is a practical way to meet this need.
This entails business owners or entrepreneurs purchasing policies that will compensate them in case they experience financial loss due to particular events.
Of course, this is a broad definition. Varying policies apply to varying events and under different circumstances.
Commercial insurance is generally designed to protect your company from common risks or liabilities.
This includes things like property damage and theft, customer injury, third-party lawsuits, client lawsuits, etc.
Commercial insurance won’t protect you against everything, but it can be a lifesaver in certain situations.
Following are the different types of Commercial Insurance:
General Liability Insurance
Running a business comes with a lot of liability. As such, you require some kind of general liability coverage.
This policy covers a wide array of injuries or damages to third-parties and their property.
If you face a lawsuit, this policy will cover most or all the costs involved in the process.
It is advisable to consider the various add-ons that general liability insurance offers.
This includes errors and omissions coverage, cyber liability, malpractice insurance etc.
Business Property Insurance
This is a policy that covers any damages that your business property sustains.
It’s generally meant to protect inventory and structures like warehouses, machinery, products, office furniture and fittings and even documents.
This makes it especially suitable for retail and service businesses.
However, not all policies will cover all your property, but you can purchase additional coverage if required.
Examples of coverage that aren’t always included are builder’s risk coverage, machinery insurance, crime coverage as well as income insurance.
Every business is different and there are various factors that come into play when determining the amount of coverage required.
Fortunately, there are insurance agents out there who can help you pick the right coverage for your company.
Workers’ Compensation Insurance
This is a policy that covers your workforce if they sustain injuries while on the job.
Workers’ compensation insurance is mandatory in all states and territories of Australia in order to run a business.
If you have any number of employees, it is highly advisable to purchase a workers’ compensation policy.
First and foremost, it’s imperative to do whatever you can to keep the workplace safe.
However, you do not have total control over the actions of your workforce.
In addition, workers’ compensation usually protects employers from negligence lawsuits, which can save you a lot of money in the long run.
Business Owners Policy
This policy bundles various kinds of business protection into one package. Business owners policies are usually quite affordable.
They can help you save money as they provide several types of business insurance and the cost is more often than not, lower than it would be if you purchase the policies separately.
If you’re considering a business owners policy, ensure you carefully go through the policy before committing.
Keep in mind that workers’ compensation, professional liability insurance and auto insurance aren’t included in the conventional business owners policy.
Deciding whether or not a BOP is the right solution for your company calls for an assessment of the features of your business.
The Bottom Line
If you purchase a package policy or general liability and property insurance separately, the fact is you do require commercial insurance and it needs to be suitable for your company.
Business insurance for a smaller and less risky business will certainly cost less than for a bigger business with greater exposure.
However, it’s possible to reduce the premiums by getting a certificate that proves you meet property and safety standards and also by picking your policies and insurance company wisely.
For an obligation-free, competitive quote, professional insurance advice or more information on how we can help you, please contact one of our expert consultants today on (08) 8357 1422 or send a message through our website
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