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Understanding Insurance for Small Business

John Rowley - Tuesday, July 14, 2015
  • Commercial general liability insurance protects your company if the actions of you or your employees cause personal injury or property damage. Commercial liability coverage also protects your company if someone is injured on your property. The coverage pays for your obligations, such as medical costs for personal injury or repair and replacement costs for personal property damage. In addition, general commercial liability may cover legal fees, as well as possible compensatory and punitive damages awarded in the event of a lawsuit. Legal fees and damage awards can escalate quickly in the event of a suit or mediation.
  • Product liability insurance protects your company if a product you design, manufacture or sell causes injury or property damage. A product could cause injury or property damage because of a design flaw, an error in the manufacturing process or due to failure to properly instruct or warn a consumer about potential dangers. In many cases product liability suits are brought against everyone involved in the development, creation and sale of the product. Each state determines its own product liability law via statutes and judicial decisions. In some jurisdictions product liability matters are considered on the basis of strict liability in which case your level of fault is not a potential defense. Even if the defect that caused an injury was accidental your business could still be liable for damages. 

  • Property insurance will help protect your office equipment, furniture and fixtures. You may be able to include property insurance with your commercial liability coverage. If you have a home-based business your homeowners or renters insurance policy may exclude business assets. Contact your insurance broker to see if your existing coverage allows a home-based business rider.

  • Professional liability insurance, sometimes referred to as errors and omissions insurance, protects professionals from liability caused by mistakes or malpractice. Professional liability insurance is important and sometimes required for certain professions such as lawyers, doctors and financial advisors. 

  • Commercial auto insurance covers dispatched drivers, delivery drivers and commercial vehicles. If you operate a delivery service, taxi service, own or lease vehicles for your business or have vehicles designed for commercial use you probably need commercial auto insurance. Never assume that your personal auto insurance covers commercial use. Talk to your insurance company to find out what you need.
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