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Getting Your Business Insured < Business Articles By Mast Business Directory

In the corporate world that we live in, the businesses need to protect their assets and investments derived from diversified sources. Therefore they rely on various insurance policies available from difference companies. Business insurance is different from life insurance/property insurance policies. If Business insurance is not availed the giant corporate enterprises can transform into nothing overnight. All efforts shall go in vain. This is due to the risk that the business is subjected to. They key areas in a business that can be identified to get insured are property, theft, worker compensation, liability, autos and capital. In today’s world there are a lot of insurance companies providing different insurance plans according to the needs of the business. Of course, there are numerous factors that decide which insurance policy is suitable for what kind of business. In the article to follow, we shall discuss the various aspects of getting business insured.

How to get my business insured?

Property like office buildings are insured by property and casualty insurance. Care should be taken because the insurance documents contain many exceptions as to what is covered and what is not. For example, property insurance does not cover calamities like flooding; which is covered under a separate policy. To insure the products that are manufactured/ designed and supplied by the company, there is product liability insurance. Employees are covered under workers’ compensation in case they sustain any injuries at work e.g. health insurance. Protection against customers’ complaints/lawsuits is provided by general liability policy. The top management people like CEOs and directors are protected in general by life and disability insurance policies.

What all do I need to have beforehand for purchasing business insurance?

You need to have detailed information on all the sites/offices/locations where you conduct business. Vehicles used for business travels must be insured by providing vehicle numbers, model etc. Names, addresses and family-related information of employees are required. You need to present latest report on assets and liabilities of your company. Information on if anything else is insured by any other insurance company should be disclosed. Company policy documents and license information of all operations in your business. Information on claims in the past, lawsuits which the business owners are hesitant to discuss.

How to lower business insurance premiums?

Many professional organizations or business groups offer business insurance. This is a benefit of their insurance. For example, a firm with large number of employees avails benefit of health insurance from business groups that readily offer health insurance as a membership package. These health insurance policies are tailored to meet the individual firms’ health insurance claims for its employees. Companies save a lot of money on such package deal memberships. Taking a day or two or whenever there is change/expansion to the business organization to review insurance needs can save millions of dollars. In such of type of reviews, you can look at policy documents, irrelevant and repetitive coverage due to changes in business which render previous coverage unnecessary. Keep a check on insurance companies to classify correctly your employees for worker’s compensation. Be proactive in your discussions with your insurer and tell him that you are looking out for a better rate. Leave minimum of health risks to reduce on health insurances- use the latest in technology to minimize health risks at workers’ sites. Training your workers on alcohol awareness can reduce your liquor liability premiums substantially.

Bad practices cause higher premiums

Underlying basis of premiums lies in the history and risk in the industry you work under and that of your company. Provide regular scheduled training to your employees and maintain a documentation of the same. Ensure that there is maximum safety at your workplace. Install fire alarms, water sprinklers, emergency exit windows, fire extinguishers at regular instants of distances. Keep a log of your maintenance. Do not leave aspect unnoticed. Cover everything that’s mandatory since not doing so can lead to inability to secure coverage later or may result even in hike in premiums. Do not hire illegal workers to save on workers’ compensation. If you hire contractors, make them follow the law and demand that they are insured before commencing work. Develop long term relationships with a good insurance company rather than those shaky unreliable ones.

“Claims made” and “occurrence” policies

Claims made policies cover the work done by your business survives for a long term in the future. They provide coverage subject to the period of the policy being in force. These policies are valid only till the period when the insurer continues to pay the premiums or renews the insurance contract. This exposes the business to a risk of no insurance after a long time once the policy has ended. Any unreported and unknown claim can ruin the owner after the policy period. Changing insurance company in this case make you purchase tail coverage. So now the question: Which type of policy do I chose for my business? Well it depends on a number of factors. Obviously, claims made policies cost you far lesser than occurrence policies. Occurrence policy providing coverage over a number of years, does not take into account the rate at which inflation affects the insured item whereas claims made policy does. Switching between insurers is easy for occurrence policies as opposed to claims made. This is because while changing insurers in claims made, you have to make an initial payment of acts endorsements. Occurrence policies are suited for construction works’ companies where risk involved is high and claims can be made against faults in construction after a long time.

Insurance for business executives who travel

Expensive travel plans in business are subject to cancellation or change depending upon the need. A refundable business class air ticket and waiver on travel tickets offered by travel agencies isn’t always going to materialize. In these types of situations, travel insurance comes to the rescue. Travel insurance covers trip cancellation fee, medical emergencies like heart-attacks during travel, transportation of an employee subjected to a medical risk from visited country to his home country, costs to be covered when there is an accident, luggage coverage for personal belongings. Typically, the travel insurances are worth 4 to 8 percent off the total trip cost.

Specialized Insurance Policies

Different businesses demand different kinds of insurance policies. Basic policies tend to render coverage on certain aspects of the business useless. Sometimes, a business may need a customized type of insurance policy owing to the unique type of operations that it offers. A company which is spread across different countries may require an International liability policy and you may be covered for various aspects in the countries that you do business. Engineering design firms, accounting firms, investment banks etc. tend to generate documentation that are confidential and should not be let out in public. Leakage or losing of such document may cause them adverse penalties to be dealt with. Coverage provided against such valuable documentation is called valuable papers insurance.

Insurance policy obligations

You should not hide any claims. Even the things that may eventually lead to claims must be disclosed. Always co-operate with your insurer when an investigation occurs due to a claim. It is in the insurance contract to co-operate. Do not falsify any claims, always let out only true information. Follow laws and regulations from the government bodies. Your insurer is compelled to pay up for any loss that is covered up to the limits of insurance which is stated in the policy documents you purchase.

What happens when a business is taken to court of law?

You never know when and from where will a liability claim come from. You and your business might have nothing to do with the damage for which claims are being held out. Yet you are guilty in the eyes of law. For example, an auto accident involving your company vehicle with a driver from a different agency and the passenger being a visitor of the company does not overshadow the claims from the other party. Always keep a backup plan to handle such liability claims. Focus should be given on reduction of risk as well as how to respond in situations involving damage or injury. Train your employees on dangers of rash driving, drunk-driving and how it can adversely affect the company. Insurance documentation is a must for every vehicle that is owned/ hired by the company. Have an insurance policy which covers almost all claims possible. CCTV cameras in the company premises can be a tool to prove innocence of the company. We can limit number of company vehicle accidents through surveillance and monitoring of registration number and the employees driving them. Thus in the above report we have covered most of the aspects of business insurance. A detailed discussion of insurance policies with an insurer who is trusted in the market can cover company’s unexpected and unusual liability claims easily. A review of the policy documents periodically and how they affect the company’s premiums can be used to evaluate how much unnecessary investments is a company subject to. However, it is necessary to note that insurance is a matter of unexpected damages and claims, and hence no insurance policy is fool-proof in totality and will not cover your business against all possible claims still exposing some risk factors for which an insurance policy is never thought of.

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