Businesses engage in inherently risky behaviour. It’s impossible to guess at how the consumers might react to a corporation’s actions. If your company gets sued, you’ll want the right type of insurance cover. Likewise, if something happens to key employees within your operation, you’ll want insurance coverage that protects your business and keeps the doors open.
General Liability Cover
Every business has at least some need for general liability coverage – assuming that customers come to your place of business. General liability covers you if someone is injured on your property. Without it, a client, vendor, or even a visitor to your establishment might sue you if they’re injured on your property.
You could end up spending thousands, perhaps millions, of dollars on lawyers and potentially a judgement against you. Think of this type of insurance as a safety net against customers that might unintentionally be harmed by either your products or while on your property.
Corporate Life Insurance Cover
Life insurance has many uses, but most businesses overlook it. Key person insurance, for example, provides your company with the money needed to find, hire, and train a new executive if yours dies. Why would you need this? Let’s say that you have one of the best engineers in your industry working for you. One day, he’s driving home from work and is involved in a head-on collision.
He dies. Obviously, he is irreplaceable, but you need a new engineer. You don’t want to just hire anyone – you need money to keep your business alive and paying the bills. At the same time, you need to go out and find new talent. A key person life insurance policy gives you that money.
You can create attractive financial incentives, including executive bonus plans, for your new or existing executives with life insurance.
Finally, some companies find that life insurance makes an effective vehicle for capital reserves of the company. This is an underrated use of life insurance – most businesses experience times when the business slows down. Sales are slow, or the economy softens. Corporate life insurance comes equipped with a cash value that can provide the money needed to pay current bills. It can also pay off outstanding debts if you die, allowing the business to continue on without you.
Professional Liability Insurance
Professional liability generally includes any insurance specific to your industry. For example, while general liability protects you from being sued over a defective product, errors and omissions insurance protects you from lawsuits arising from doing business as a professional.
An example of this would be professional liability cover for insurance agents. Insurance companies are liable for the products they sell, but insurance agents are liable for their own conduct, the sales practises they engage in, and their recommendations to clients.
Lawyers, doctors, and other professionals have similar liability insurance covers for their respective industries. If your industry is a professional one, you’ll need professional liability cover. Not having it usually illegal – more than that, it puts your company at great financial risk. Lawsuits arising over professional negligence or liability often involve millions of pounds of damage.
Luca Richardson has become extensively knowledgeable of business insurance topics over the years. His articles mainly appear on business blogs. Visit the Lloyds link for more ideas and information.