A business is exposed to a multitude of risks every time it opens its doors, from damage, fire, accident, and loss to being sued for injuries by their clients or other people.
Even worse, the financial consequences of any incident can force you out of business.
That’s why commercial insurance so important for your business. Insurance covers can offer protection in case client or passerby is injured by your operations or products, or if your building is damaged by an incident such as a fire.
Here we have rounded up important commercial business insurance types should consider.
Professional Indemnity Insurance:
Professional indemnity insurance is meant for professionals who give advice to their customers or clients for a fee.
This can protect you if a client sues you for incorrect or inadequate advice.
For example, a crucial spelling mistake in an advertisement can land your marketing agency in trouble. Or your IT firm can be sued by a client for over software that didn’t work. Accountants can be accused for providing incorrect or incomplete tax advice that led the client to huge losses.
The point is that a client has every reason to bring you to the court if your unprofessional advice or faulty service causes damage or personal loss.
Professional indemnity insurance can protect your business from such claims and legal costs. Apart from covering the cost of defense, it can be used to pay compensation to the client following a claim filed against you.
Professional indemnity insurance is ideal for accountants, architects, business consultants, IT firms, market research firms, surveyors, HR agencies, and real estate agents.
Public Liability Insurance:
Public liability insurance can help you cover legal costs and compensation made against your business if someone gets injured, or their property is damaged, because of your business activities.
For example, a tap that has been repaired by you some weeks ago gets a serious leak that damages the property of your client. One of your employees breaks an expensive vase at the customer’s home while installing a new appliance. What if a client ends up with a broken arm after falling down the stairs at your business premises?
Having public liability insurance can help cover the costs and compensation caused by the claims of injuries and damages against you.
The difference between public liability and professional indemnity insurance is that public liability is designed for claims by clients for injury or damage caused by your work; while professional indemnity covers claims by clients for losses they incur because of your advice or professional service.
It is important insurance for you if you deal with products or tangible items.
Product liability insurance can cover your liability for damages and injuries caused by your defected or inferior products.
Generally, product liability is used for situations where someone buys a product, and a fault in the product causes an injury or property damage to a third party. Apart from that, food businesses may also be covered by this liability if their food or beverages cause illness.
Whether you are a small baker selling amazing cakes or a retail store selling nice clothes, make sure to have product liability insurance to get protection against the risk of product liability claims. The moment you start offering your products you are prone to product liability lawsuits, which can be costly and frustrating.
Business Interruption Insurance:
From fire, storm, busted pipes, and theft many events can potentially bring your business to halt. You might not be able to continue your business until the issues are resolved. On top of that, you are required to pay rent and wages despite not being able to trade as you would normally.
Here comes business interruption insurance.
Also known as business continuity insurance or business revenue insurance, business interruption insurance helps you cover the loss caused by the interruption of your business. Some insurance plans cover wages for business owners, staff as well as ongoing expenses such as rent. Some insurance covers may provide a fund that lets you continue trading while your business revenues recover.
The cost of business interruption insurance varies based on the size and type of business.
Commercial Vehicle Insurance:
Many businesses use vehicles such as vans, light trucks, excavators, bulldozers or cars for their operations. Therefore, opting for the right commercial vehicle cover is important. Commercial motor vehicle insurance might ensure protection against damage or theft, towing cost, emergency repairs, fire, and legal liability.
Commercial insurance for your business can help you keep trading when things do not go as planned.
They can provide protection against liability, business risks and expensive lawsuits. Running a business without a solid insurance cover is asking for trouble. However, it is important to choose the right insurance plan based on your requirements and risks. It is equally important to choose an experienced insurance broker.
*Important: Cover may be available subject to meeting insurers underwriting criteria. Some of the covers listed may or may not be available or may have limitations or exclusions. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.
Romit Malhotra is the brand representative of Smart Business Insurance, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.