Posted by admin on January 8th, 2010
When you set your mind on the development of your future business and compete for success there’s a certain thing that you always have to remember about: risk. Risk is an inevitable part of any business enterprise no matter how “safe” it may look in theory. Just like your car may crash into another car, your business can become a victim of a natural disaster, legal liability or other risk that will make your efforts useless. That is where insurance can serve you right.
What do you need in terms of coverage?
The amounts of coverage and types of coverage to be included into your policy depend on the size of your business and what does exactly. In case your business uses rent space it is better to ask your landlord if there are any specific insurance requirements your business has to meet. It is quite possible that your landlord or leasing company will require you to buy commercial property insurance. This type of insurance covers mostly the building itself and the items contained in your office.
Think about liability insurance
Even if your business has the form of a corporation that limits your personal legal responsibility in case of legal claims, there are situations when you can be held responsible in person for your company’s actions. This where liability coverage kicks in. Liability insurance coverage will protect you and your business from legal action and depending on the type of your enterprise’s activities you can purchase various specific types of liability protection.
Even if your business produces the safest of products or offers virtually harmless services there’s just always a possibility that someone will sue you. And there are too many companies that have ceased their operation due to legal following, being uncovered by liability insurance. So try to evaluate the risk your activities may pose to third parties or your workers and get a coverage amount that will be able to pay for all the costs involved. Read the rest of this entry »
Posted by admin on December 24th, 2009
Some insurance policies covering business include product liability coverage that is connected to the production and marketing of goods to the consumers. This type of insurance coverage protects the seller or the producer from liability due to malfunctioning or defects of the product claimed by the final customer. In case this coverage makes part of a general liability insurance policy for the business, it is also referred to as called products-completed operations coverage.
In order to understand how much importance this type of coverage may have for your business, it is important to fully understand the consequences of not having it. When you don’t have such insurance coverage, your business can face on of the following three types of claims:
1) Malfunctioning or defunct product – Such claims can arise due to errors or defects during the manufacturing process, rendering the final product defunct or even unsafe to use. One of the most recent examples of such claims are legal actions against Chinese manufacturers due to the use dangerous chemicals in the production process.
2) Defects in design – Claims of this type are caused by an initially unsafe or even dangerous design of the product. The infamous Pinto claims the Ford company had to face in 1970′s are probably the most memorable examples of such claims.
3) Unreliable warnings – These claims arise from improper labeling or instructions of the product that don’t warn in full about the potential risks and hazards of the product’s use. Think of the “coffee case” filed on McDonalds to understand better.
What people get from these claims is mostly economic and compensatory damages, medical bills and in some cases court and attorney’s fees. And if you think that a business relatively big can face such claims without serious drawbacks, think again, because there were just too many businesses both big and small that went down due to legal action like that.
Those who deal will selling and reselling products and goods are not likely to have any benefits from such coverage, at first sight. Such economic agents are simple distributors and most claims are filed against product manufacturers. But this doesn’t mean that they will not face legal action too. Some states call sellers and distributors together with manufacturers to legal responsibility for putting the product into the market and exposing customers to risks. Read the rest of this entry »
