Archive for September 2014
When it comes to insurance, businesses have a lot more to worry about than just health insurance. Professional liability insurance, for instance, aims to protect people (and businesses) from costly lawsuits relating to the performance of their professional responsibilities. Common examples of these are malpractice insurance for doctors and lawyers.
Malpractice or negligence is just one aspect of the liabilities insurance. Customers or clients could file a lawsuit against companies for a variety of reasons, such as failure to deliver a promised product or service, production and distribution of inferior or damaged merchandise, errors in judgment calls, and many others.
Every Lawsuit Counts
Many professionals believe that since malpractice lawsuits essentially have low probabilities of succeeding, they can do away with professional liability insurance. However, the fact is, the moment your business is summoned to appear in court, the costs are already flowing out of your pocket, something that could take a huge toll on your revenues.
Know that most liability insurance offered by firms involve claims-based coverage. This means that only lawsuits made and reported during the period of your policy will be reviewed. If there are previous claims that you want covered, look for a retroactivity coverage. If you’re retired but you’re still concerned about lawsuits made relating to your previous services, look for extended coverage.
For small New Jersey companies, purchasing insurance is just like paying taxes—it’s a basic part of any household budget. However, with all the choices out there, choosing the right insurance company from an array of popular insurance companies nationwide, can be quite daunting. Fortunately, an insurance broker can make the process as quick and hassle-free as possible.
What does an insurance broker do?
Insurance brokers, in stark contrast to insurance agents, are completely independent and are able to represent many insurance companies. Thus, in theory, an insurance broker can give you—the client—the best coverage at the lowest price. Brokers can guide you through the messy paperwork and help you understand the unintelligible jargon commonly found in many insurance contracts.
How are they different from insurance agents?
Generally speaking, the work of an insurance agent and a broker are entirely different. However, the line between the two can often get blurry in the real world: good agents will be willing to refer their clients to other popular insurance companies just to give them the best rates, while some brokers have special relationships with particular insurance companies because of stronger ties and a sense of loyalty. Despite this common role-switching, it still pays to talk to an insurance broker over an agent because of the broader reach and choices they offer.
No business is safe from several factors that might put its critical assets in trouble over time. Several untoward happenings like natural disasters or civil unrest subject any type of enterprise to great risks, especially those that are particularly new in their field or industry. Therefore, to protect themselves, startups need to have these essential insurance coverages at their disposal:
General liability – Contrary to popular belief, this type of insurance doesn’t make a business immune to lawsuits, but rather provide financial protection should legal claims find their way to the doorstep. Structured to cover aspects like financial settlements and legal costs, liability insurance effectively shields a startup company’s assets whenever unsatisfied customers decide to take their claims to court.
Property – Startup business owners need to take note that while profits are good, their physical assets are also critical. Property insurance basically encompasses assets like equipment, inventory, furniture, and even the entire building, as well as accounting records. This specific policy (provided that all relevant terms are agreed upon) can protect a business’ physical assets against damages from disasters, man-made or natural, and whether they’re owned or leased.
Worker’s compensation – In several states and cities, businesses are mandated by law to have this type of insurance. On simple terms, this coverage compensates an employee for lost wage and medical expenses in the event that he/she gets injured on the job and requires medical treatment, in exchange for an agreement that the employee doesn’t sue the employer at any time.
Do you run your business out of your own home? If so, then you need to obtain an add-on (or rider) to your existing homeowner’s policy to cover your business. Many others fail to obtain this add-on because they are confused with what’s already covered by their homeowner’s (or renter’s) policy. You should know that if you failed to disclose your home-based business to your insurance provider, any claim for losses or damages sustained or caused by it may be refused. Your insurer may even cancel your policy altogether.
If your home and business location are one and the same, your best bet is to obtain coverage for your business as well. Did you know that if the delivery guy comes with a business package at your door and he slips and injures himself in the process, you could be paying for his medical expenses from your own pocket? There’s no coverage for this type of injury in your homeowner’s policy, and with the amount of loss you could be facing, you’re sure to regret not obtaining insurance for your business in the first place.
An add-on to your homeowner’s policy generally provides around $2500 additional coverage, which is usually enough for sole proprietorship-type business. However, if you have a lot of valuable equipment and a lot of people visiting your home for business matters, consider acquiring an in-home business policy.