by Marie King
Small businesses differ greatly from large corporations, yet these micro companies need to have the same protections that there larger counterparts do. Part of this need in the USA stems from the fact that small businesses, defined as having 500 or less employees, provide more than 80% of the jobs in America.
This small business need extends to having an excellent risk management strategy, which insurance is a major piece. These insurance products not only protect the company, but also protect its greatest asset, its employees. There are a number of insurance products that have been tailored to meet the special needs of small businesses.
Contractors insurance consists of general liability and workers’ comp insurance.
General liability insurance protects the small business owners in the construction field against the possible legal hassles that can occur as part of the price of doing business. This type of insurance focuses on paying the cost of defending lawsuits, settlement bonds or judgments after a legal decision has been made.
General liability has four areas that it zeros in on: bodily injury, property loss, personal injury and advertising injury. This type of insurance protects against lawsuits, where you have injured other people, damaged their property, hurt their reputation or infringed on their copyright.
Workers compensation insurance benefits the employees. If an employee is injured on the job, workers comp will provide wage replacement and medical care. These benefits will continue until the worker is well enough to go back to work or declared permanently disabled. Workers comp also includes a death benefit in the case of a fatality.
Product liability insurance was developed to protect companies that manufacture a product from legal damages. The primary focus is on when the product causes injury or bodily harm. The amount of coverage that a product manufacturer needs to have depends on the product that the business owner produces. A clothing company is seen as less risky than an appliance company, where the possibility of the customer sustaining injury is higher.
Professional liability insurance is recommended for a business that provides a service. Every company provides a service. This would be a service not revolving around a product the company had manufactured or a construction service like being a roofer. This is a service that an IT professional or accountant might provide.This type of insurance protects against lawsuits involving malpractice, error and negligence in the provision of services to customers.
Commercial property insurance has a broad reaching definition. It can include lost income, business interruption, buildings, computers, company papers and money. It also includes events such as fire, smoke, floods, etc. What it includes depends on whether it is an all-risk policy or a peril specific policy. All risk includes a laundry list of events or situations that will be covered. Peril specific focuses on a specific type of event like a flood, fire or tornado, and money will be paid out if one of these events happen.