In part one of this series, we discussed the various types of insurance that cover the physical aspects of business. This time, we’ll go over the less tangible elements of business insurance and why you might need each type of coverage, depending on what kind of business you have.
Protection for the less tangible can include professional liability insurance, workers compensation, product liability and business interruption insurance.
Professional Liability Insurance
Professional liability insurance is also known as errors and omissions (E&O) insurance. Most all businesses need this kind of insurance, as it covers you against claims of negligence or failure to perform the services promised. Professional liability insurance differs from industry to industry, business to business, so chances are, you will need a customized policy. This is where we come in. We all know that in D.C. metro, there’s a lawyer on every corner, so you’ll need insurance in your own corner.
Virginia requires that businesses with employees have workers compensation insurance to cover medical treatment, as well as disability and death. This goes for businesses that seem to have low risk. We have heard business owners say, “Why should I get workers comp for my employees? All they do is type.” Well, these employees could get carpal tunnel syndrome. They could slip and fall. They could get back or neck injuries from sitting in a worn-out chair. All of those scenarios mean potential liability for your business.
Product Liability Insurance
We can’t stress this enough. If your business produces and sells a product of any kind, you need product liability insurance. Anyone can come back and claim that they were injured as a result of using your products. Think of the famous McDonald’s coffee case. Someone spilled hot coffee on themselves and got burned. There was a complicated legal fight over this incident, but one of the outcomes is that we now see warnings on McDonald’s cups saying “contents is hot.” However, it’s not enough for McDonald’s to have a warning. They still need insurance in case someone claims they were injured by that product. You need something similar, specific to the products you sell.
Business Interruption Insurance
An interruption in business can occur for any number of reasons. Let’s say you had a fire in your office. Equipment is destroyed, the flooring is ruined and the whole office needs a rehaul. While your business property insurance might cover many of the assets destroyed, what happens to the revenue you lose as a result of not being able to carry on business as usual? That’s where business interruption insurance comes in.
As with all insurance types, business insurance can be basic or include a full range of coverage. Talk to us about what kinds of business insurance you need for your particular industry, products and services. We will never try to over-insure you, but we will guide to you make sure you are aware of potential liabilities and losses.