Business Insurance Types
Public Liability Insurance is probably the most important type of business insurance type to have. If an employee or your company injures a third-party during the course of normal business, public liability insurance will help shield your business from the financial repercussions of legal suits. Public liability insurance also covers employees and people who come in contact with company property. The idea behind public liability insurance is that if a customer or client gets injured while using your property, and that customer or client files a lawsuit against your business, you will be financially protected. The damages awarded in court may bankrupt your company. Public liability coverage is very specific, and the insurance companies that offer it must follow very strict rules in order to stay in business.
Professional Indemnity Insurance protects your assets in the event that you are sued for something that happened while at work. It covers not only employees but professional or contractual partners, and business partners. Professional indemnity insurance is usually required by larger employers, as well as by state law in many locations. In order to get this type of insurance, you must first complete a written policy. This policy gives details about the types of damages that the policy covers, and it also explains that businesses are qualified for the policy.
Professional Liability Insurance includes two different business insurance types: professional indemnity insurance and professional liability insurance. They cover individuals who are allowed to make claims against your business and yourself. Professional liability coverage does not pay for any action that you take against a third party, and it does not provide coverage for injuries on the work-site. Professional liability coverage will pay medical costs that exceed expected amounts, settlement costs that exceed established limits, and awards that exceed the amount of coverage provided. These limits are typically based on the number of patients you expect to see every day.
Bailee Policy – The bailee policy protects your business assets in the event that a customer becomes ill or dies while at your business. The policy will compensate for property damage and medical expenses, up to the limits of the policy. Depending on your location, you may also be protected against property vandalism and other types of claims. This type of business insurance types typically only cover customers who have frequent or certain visits to your establishment.
Claims-Made Policy – If your customers call in a claim, this policy will cover you from all potential liability claims. This includes all liability claims-made against you and your employees. Your claims-made policy period is typically one year, although you can extend it if necessary.
Tail Coverage – The tail coverage is a one-time coverage offered in liability policies. If you have a liability limit that falls short of the current amount of liability coverage, your company can purchase tail coverage to meet your needs. However, your company may have shrinking limits, which make it less beneficial in the event that you have liability issues.
Extra Expense Coverage – The extra expense coverage protects you against any unexpected expenditures that are not included within your business’s budget. For example, if you need to rent office space for your business, this type of insurance will cover the rental, which could include any electricity or gas expenses, but not your phone bill. Depending on your location, you may be covered against professional fees, advertising expenses, or even legal fees and charges. Some policies do not include the cost of parking. This insurance rarely covers any seasonal or daily operating expenses, such as payroll, sales, supplies, or insurance and bond premiums.
Business owners often think that changing insurance carriers is a way to save money, but these plans actually cost more in the long run. Insurance companies that are constantly changing their underwriting standards increase premiums. Premiums also increase with growing age of the business’s workforce. While you may be able to lower premiums by a few dollars per month by changing carriers, it is important to realize that these savings are insignificant when compared to the potential costs of excessive loss of business assets and liabilities. Therefore, it is recommended that business owners stay with the same insurance carrier for the entire term of the policy.