subject: Commercial Insurance Policy - Life and Health of Business [print this page] Commercial Insurance Policy - Life and Health of Business
One of the highly significant investments that an owner of a business must make is the commercial insurance policy. This helps safeguard a business against the potential losses in the type of thefts, damage as well as lawful claims made against the firm.
Moreover, it delivers shield to the workers/ employees. Now in majority of the nations it is obligatory for all the commercial houses to get appropriate amount of employer's liability coverage that can be merged with other coverages in one commercial insurance policy. Like health as well as life insurance is vital for each and every individual, this insurance policy is the blood of any business. In essence, this coverage can be considered as the contingency plan that a business owner pays for on annually or monthly basis.
Among the common problems that may happen during business hours are breakdown of machinery and injuries to the workers. Hence, it becomes prudent to be equipped before- hand with adequate insurance policy in order to not permit any stroke of misfortune. The eminent elements of this policy are natural disasters, injury and equipment. Injuries may happen at any time to the workers and also clients who visit the business premises.
Product Liability Insurance is an important part of the commercial general liability policy. Product Liability Coverage safeguards the business from any claims related to medicines, food, manufacture or sale of the goods to the general public. It covers the seller's or manufacturer's liability for the incurred losses or any injuries to the purchaser, bystander or user caused by some malfunction or defect of a product and in small cases, a faulty design or failure to provide a warning.
In order to understand the requirement of Product Liability Insurance it is crucial to know about the so called potential liability'. There are basically 3 kinds of product claims a business might face:
Production or Manufacturing Flaws
Usage Instructions or Defective Warnings
Design defects
The damages compensated in such claims include economic damages, compensatory damages and medical damages, in few cases attorney's fees, punitive damages and costs. The claims under product liability can put a firm out of business.
The following are usually covered under this coverage:
Profits- Profits that might have been earned and they are determined on the earlier months' financial statements.
Fixed costs- Operation costs and other expenses still being borne by the property and are determined on the basis of the historical costs.
Temporary Location- Some coverage even cover additional expenses for commuting as well as operating from a provisional location.
Extra Expenses- Compensation for reasonable expenses, which permit the firm to continue operations till the time the property is being revamped.
Business Interruption Insurance safeguards an owner of business against the losses resulting from the impermanent shutdown due to fire or any other insured hazard. Most often, business interruption coverage provides compensation for the lost net gains and vital continuing expenses.
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