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Insuring Your Risky Business

General Business Insurance

There are three main types of liability insurance you need for business: General, Product and Professional. General insurance is your starting point for protection against medical costs from injuries. It also includes risk of property damage and a few other common liabilities. The fee for business insurance will vary greatly depending on the risks associated with your line of work. A skydiving company has higher liability than a bookstore, for instance. You should speak with an agent to make sure you are not over-insured or under-insured, as either mistake can end up costing you.

Product and Professional Liability

The remaining two types of insurance can be summed up as coverage for the things that you make (product) and the advice you give (professional). If either of these gets you caught up in a lawsuit, your insurance takes care of legal fees and other associated costs. Take a doctor’s office, for instance. This type of business would need higher professional liability coverage because they provide medical advice to patients. If the office was also to include a small shop that sells vitamin supplements or beauty creams, these would need to be covered under product liability insurance. For most businesses, these coverage’s go hand-in-hand.

Small vs Large Businesses

For small/low risk establishments, a Business Owner’s Policy might better suit your needs. This combines general and product liability insurance into a condensed policy. Business Owners Policies are usually cheaper to buy but have limited coverage. You may need add-ons for adequate protection. Large businesses with bigger risk can opt for excess insurance or an “umbrella policy”. These are two different ways of increasing your coverage. Excess insurance extends coverage under your current plan, providing a larger pool of money to cover the stipulations already outlined. Umbrella policies expand coverage to a broader range of circumstances. This would cover additional things that weren’t originally part of your basic plan. A comprehensive insurance plan should be tailored to suit your specific business by an experienced professional.

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