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5 kinds of business insurance companies may need to carry

On Behalf of | Apr 6, 2023 | Risk Management

Even the surest business venture comes with unforeseeable risks. Disruption in the supply chain might leave production facilities idle for months and push a company to the brink of insolvency. A few poor hiring choices could lead to a substantial drop in quality and expensive product liability claims could lead to the closure of the company.

Creditors, employees and unhappy clients could all pursue expensive lawsuits against a company. Yet, entrepreneurs and investors do not have to blindly accept risk simply because they want to run a business. They can proactively address known risk factors to limit their exposure. They can also purchase insurance. Numerous types of insurance are available to help organizations limit their risk.

1. General liability coverage

Any time someone gets hurt or there is an incident that causes property damage, a business could be at risk of a lawsuit. General liability coverage is a great starting point for protecting the organization and its leadership from injury claims.

2. Premises liability coverage

Any business with a physical location that employees or members of the public visit could end up subject to claims when people get hurt at that property. Premises liability coverage is an important addition to a general business policy for most organizations with offices or retail spaces open to the public.

3. Product liability coverage

Any company producing products either for retail sale or used by other businesses will have the risk of product failures causing injury or property damage. Product liability coverage helps protect businesses against financial claims if one of their products causes a fighter or electrocutes someone.

4. Errors and omissions coverage

Businesses that provide professional services may need to carry insurance that protects them against mistakes when working with clients that would be comparable in many ways to product liability coverage for businesses that sell goods. Lawyers, doctors and similar professionals may need to carry specialized malpractice coverage.

5. Business interruption insurance

Any organization with substantial facility expenses or multiple staff members may need to consider investing in business Interruption coverage. Such insurance can cover rent and even staffing expenses when a business cannot operate due to extenuating circumstances, like a natural disaster.

Organizations that carry appropriate kinds of insurance can benefit from the knowledge that their daily operations have invested in protection from the uncertainties of an ever-shifting market and legal climate. Learning more about business insurance and securing the right coverage with the assistance of an experienced legal professional can help entrepreneurs and business owners who are worried about liability risks.