Business Owner’s Insurance Policies

Business owner’s insurance policies protect businesses against unanticipated losses such as theft and equipment damage etc and are an inevitable cost of operating a business.

Business owner’s insurance policies are an ideal product for protecting your business from bankruptcy and/or insolvency in case of difficult financial situations. Besides covering conventional losses such as theft and equipment damage etc. most business owner’s insurance policies also provide protection against liability claims from clients and employees in case of injury in your premises (for clients) or at work (for employees). This is, however, not an inherent feature of all business insurance policies and will vary from company to company. In case of business insurance for a home business first damage covered is that to business equipment including laptops, PDAs, desktops, printers, photocopiers, fax machines, cell phones and answering machines etc.

Liability Protection for Home Business Owners

If your business requires liability protection as part of your business owner’s insurance policy it may not be a wise decision to amend your homeowner’s insurance policy. Most companies providing homeowner’s insurance with (partial) protection for your business would not be willing to provide liability insurance. Liability protection is vital for most service providers because they have higher probability of being sued. This is because it is not as easy to determine exact specifications of a service/project as it is for a product. Thus your end product may not be in line with customer needs raising a dispute. Most business insurance companies offer protection for damage to key property along with liability protection in one policy. However, they can also be separated as per your needs. This is because of the varying needs of small, medium and large businesses operating in different markets. Small and medium sized businesses usually prefer business owner’s policy. Businesses facing similar type of risks can also be offered package policies.

Types of Business Owner’s Insurance Policies

There are two types of business owner’s policy i.e. standard and special policies providing comprehensive cover. Business owner’s insurance can also provide property insurance for various properties owned by the company. Business interval insurance or business disturbance insurance providing covers against loss of income because of fire and/or other disasters (such as floods, hurricanes, earthquakes etc.). It also covers additional expenses incurred in (shifting and) operating from a temporary location. As discussed above liability insurance covers the business against liability suits including physical or emotional damage to your clients and/or employers as well as property damage because of faulty products, defective installations and mistakes in service provision.
Business owner’s insurance policy, however, does not cover professional liability, vehicle insurance and employee compensation for health and disability. Thus, separate insurance policies in addition to business owner’s insurance are required to cover professional services, automobiles and employees. Capital, motivation and consistency are required for launching and running a (new) business. Along with higher returns it has greater risks, as you cannot predict the success or failure or your venture. According to a survey one out of every five businesses fail within five years of starting operations. This is because entrepreneurs often ignore the most basic requirements of starting a new business and launch the venture haphazardly.

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