Small Business Insurance: Protect Your Business From Risks - Essay Sample

Introduction

Small businesses need insurance to ensure they are protected against all the different types of risks they may face. Business insurance is a risk administration tool that assists a company to handover the threat of loss to an insurance firm. It is relevant for businesses, whether big or small, to insure against threats such as legal liability, natural disaster, theft, or even the death or disability of significant workers. These are crucial, especially for small businesses. In most cases, the life reserves of the small business proprietor are usually tangled up in the firm, and the possessor must take the necessary measures to guard the family against any financial consequences of events. The dealings could disrupt activities, minimize revenues, and even lead the business to bankruptcy. Through insurance, a small business is supported to be prosperous by minimizing uncertainties under which it operates (Kealy, 2015). Professional liability, general liability, commercial property, and product liability are the four types of insurance for small businesses and entirely relevant.

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General liability insurance is a policy that covers a wide variety of claims. A business faces possible legal liability to another company or person due to negligence or an accident. However, general liability insurance is not meant to cover all types of exposures. It covers property damage, bodily injury, personal injury, and property damage. It also covers other risks that can occur from business activities. Some of the general liability insurance quotes include medical payments, damage to the premise rented to a business, physical injury and property destruction liability, and private and marketing injury (Le, 2019). Therefore, it is apparent that general liability insurance protects the business and the owner from daily operations.

There is also professional liability insurance that should be considered by small businesses that offer professional services or advise clients. It provides security when a business owner has been prosecuted for slackness since their work does not meet the specific prospects of the client. The professional liability insurance may also be needed by a small business' clients when they are entering into a contract. Some of the firms that select this insurance include accountants, attorneys, architects, counselors, consultants, and real estate agents, among others (Han, 2017).

Product liability insurance is another type that guards the business against the fallout that occurs when a product causes injury or another form of damage to third parties. Clients may be harmed depending on the way a product is designed, manufactured, or even marketed. When a product is utilized incorrectly, the business may still be liable for any damage that occurs. Some small companies usually have substantial output and, as such, have a significant likelihood of their products having some defect (Le, 2019). Thus, a business that sells products should ensure that they have product liability coverage.

Commercial property insurance is another relevant policy and considered the simplest and most common for businesses. It is aimed to cover the most physical properties that a company possesses. The main aim of this insurance is to assist the business recover quickly after they have suffered a loss or damage (Kealy, 2015). Thus, this insurance entails insuring all property owned by a business despite how small it is, and it may be office furniture or a massive warehouse.

The most relevant insurance policy is product liability insurance. A small business may be dealing with food products that may end up being harmful to a client, especially when it is contaminated. Also, they may mislabel their product that may lead to sicknesses of the client after its utilization. As such, some errors are likely to occur in a business daily, and it will be relevant for a company to ensure that they are prepared by having an insurance policy. However, it is suitable for small businesses to consider taking the four insurance policies discussed. It has been observed that they are all relevant in a different way and ensure that a business is well protected from current and even future unforeseen risks.

References

Han, M. S. (2017). A study on system construction to the product liability law-with focus on a small & medium business. Journal of the Korea Academia-Industrial Cooperation Society, 18(6), 596-608.

Kealy, D. (2015). Understanding the commercial general liability policy. DWIGHT M KEALY.

Le, M. (2019). Performance Comparison and Structure Adjustment of Insurance Business of Property Insurance Companies. Archives of Business Research, 7(8), 169-179.