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A quick overview of business insurance
Purchasing business
insurance -- with its complexities, industry jargon, and intricate
legalities -- isn't exactly a task most people relish. In fact,
even inexpensive office products tend to get a far more thorough
pre-purchase evaluation than business insurance does.
But unlike a copier or a new payroll service, business insurance
is a purchase that, when not investigated properly, can literally
mean life or death for your company. Because research gets short
shrift, some firms are left underinsured, while others end up
over-insured on unnecessary or overlapping coverage.
The basics
Although it may seem overwhelming, most smaller firms can
limit their investigations to three basic types of protection:
property, general liability, and workers compensation insurance.
Property insurance protects against physical damage or loss in
the case of theft or other catastrophes.
General liability insurance is a form of insurance designed to
protect owners and operators of businesses from a wide variety
of liability exposures. These exposures could include liability
for accidents that occur on the employer's premises, for products
sold by the insured, or a dissatisfaction with work completed
by the insured.
Liability insurance often comes in the form of a Commercial
General Liability policy, also known as a CGL.
There are also specialized forms of liability insurance. For example,
Workers' Compensation is form of liability insurance that protects
a firm against claims from job-related injuries or illnesses.
Often businesses can bundle property and liability insurance needs
into a Business Owners Package Policy, also known as a BOP. (Workers'
compensation, however, is typically a separate purchase.)
Befriend a broker
Almost always, the broker is the liaison between you and the insurance
company. Brokers make a living out of matching businesses up with
appropriate insurance. Finding the right broker for your business
-- one who looks for low premiums as well as fully understands
the risks your company faces -- is a bit of a challenge, but well
worth the time spent to make sure you have the proper type and
scope of policies. |
