Small business insurance is available in many different forms from many different insurance companies. The specifics of the insurance policy and the things that are covered in a small business insurance claim will be dictated by the state that the business is operating within, and the risks inherent in the business itself. Small business owners must ensure adequate coverage, while making sure that premiums are realistic.
Types of Small Business Insurance
Many small businesses opt to go with a Business Owners Policy, or BOP. A BOP plan combines property insurance, liability insurance, and other types of coverage that may be important for the area or industry. BOP insurance can usually be tailored to fit individual needs if the business owner does not feel that all important bases are covered. If a BOP plan is not chosen or is not available, a business owner will have to make sure all necessary insurance coverages are purchased separately. Many insurance companies offer discounts for purchasing multiple plans or coverage options.
General Liability insurance
In case of lawsuits, general liability insurance is necessary. General liability insurance will cover legal costs in the case of injuries, accident, or negligence claims. If a lawsuit is filed by a customer, employee, or vendor, a small business insurance claim can be filed to help cover the costs of court and any settlements or judgments. If any lawsuits are filed, the insurance company should be contacted immediately, as the company may appoint a lawyer. Choosing to hire a lawyer or attempt to settle matters without contacting the insurance company may result in the denial of the small business insurance claim.
Professional Liability Insurance
If a business provides a service, the business may have to purchase professional liability insurance. This type of insurance protects again lawsuits claiming that the business was negligent, made errors, or knowingly engaged in malpractice while performing the service. Filing a small business insurance claim of this type can help pay for costs stemming from these particular incidents. Depending on the size of the business and the insurance company policies, these types of small business insurance claims are sometimes covered under general liability insurance. Some states require certain businesses to carry this particular type of insurance, whether it must be purchased separately or is part of a larger combined plan. This is the type of insurance that physicians are required to carry in many states.
Product Liability Insurance
If a business produces products, it may be necessary to purchase product liability insurance. Filing a small business insurance claim of this type will help a business cover costs associated with a lawsuit that is filed for injury or damage that has been directly caused by a product. Different businesses will have differing degrees of risk associated with the products, depending on what the products are. A company that manufactures hair ties will have less risk of injury from defective products than a company that manufactures power tools.
Home Based Business Insurance
Homeowner’s Insurance may cover property damage, but will not cover insurance costs stemming from operating a business out of the home. Home Based Business Insurance may be the best option for a home based business, as these types of small business insurance claims may cover costs that would normally require professional or product liability insurance to be purchased. This can be a more affordable option for home based businesses.
Commercial Property Insurance
If a business is operated on commercial property, commercial property insurance must be purchased to cover the cost of damage to the building, land, products, equipment, and employees’ property if applicable. There are a few different types of policies, and business owners should ensure that all types of calamities prevalent in the area are covered if a small business insurance claim of this type is filed.
Handling Denied Small Business Insurance Claims
If a business owner believes a situation should be covered in a small business insurance claim, and that claim is denied, it can be devastating for the business. If the business owner feels that the insurance company has been intentionally misleading, an attorney should be contacted. An attorney may be able to help the business owner recover the money due from the small business insurance claim if it is discovered that the insurance company participated in unethical practices.
Sources:
“BOP Insurance-FAX.” Hiscox Small Business. Hiscox Inc, n.d. Web. 23 Sep 2013. <http://www.hiscoxusa.com/small-business-insurance/business-owner-insurance/bop-faq/>.
“Types of Business Insurance.” SBA.gov U.S. Small Business Administration. SBA.gov, n.d. Web. 23 Sep 2013. <http://www.sba.gov/content/types-business-insurance>.
“Small Business.” Healthcare.gov. U.S. Centers for Medicare and Medicaid Services, n.d. Web. 23 Sep 2013. <https://www.healthcare.gov/small-businesses/>.