Running a successful business always comes with inherent risks. A client could file a suit, a natural disaster can ruin things, or someone can get injured on the site. For this reason, it is essential that a business has an insurance policy in place to protect itself as well as its assets. Getting the business adequately insured provides the following benefits:
Provides bodily injury coverage
In case the business or its operations causes injury to any other person, then the liability insurance covers for the bodily injury caused.
Provides property damage coverage
In case the business or its operations causes damage to other party’s property, then the property damage coverage in the liability insurance, covers for such loss.
Covers for advertising liability
In an event when the business violates copyright rule of some other party or business, it may cause a copyright infringement issue. However, liability insurance comes to the rescue as it covers the legal liability against such claims.
Helps minimise the financial losses
Having a business insurance in place helps the business to reduce financial losses when an unfortunate event occurs.
For example, when there is a breakdown of a particular critical machinery, the firm might not be able to function properly, and this will lead to a loss of revenue. But having a business liability insurance policy will help the company to cover any losses incurred during the period.
Coverage for lawsuits and settlements
When business causes damage of any sort, the liability insurance policy0020covers the investigation and attorney expenses, when a lawsuit is filed against it.
Helps promotes business continuity
An unforeseen event can hit any company, and if the company does not have an insurance policy to help protect against such event, it may lead to the end of the business if not properly managed. However, a business liability insurance helps to minimise risks so that the business continues to operate and grow.
Aids in risk-sharing
When a company makes losses, the insurance company can come to the rescue. In an event where some business hits severe misfortunes, it may not be able to solely afford the cost of getting back on track and running again. However, in case of an insured business, the risk is shared between the company and in the insurance company.
Protects the business image
When a business suffers due to an unfortunate event, not only the business suffers, but its customers, stakeholders, shareholders and the public are affected too. Therefore, insurance helps to manage bad occurrences to protect the business and every customer attached to the business.
‘The Bellmount Company’ was in the toy manufacturing business for a decade and was well-known for the arrays of toys that it produced by different age groups of children. The company had many clients in Mumbai that included many local toy shops. In May 2016, the company received an order to make 150 toys for a birthday event. The company began with the manufacturing and packaging process and successfully completed the order.
Upon order completion, the toys were delivered to the client, who in turn gave the product to the guests as return gift after the birthday party. However, one of the toys was found to be broken. Due to the manufacturing defect in the toy, the sharp plastic edges were exposed and caused several cuts to one of a child and injured him. A lawsuit was filed against the Bellmount Company.
Luckily, the company had a liability insurance policy that offered the bodily injury liability coverage. Hence they immediately approached their insurance company.
When the case reached the court, the liability insurance policy covered legal expenses and paid compensation to the injured child.
Since ‘The Bellmount Company’ had adequately secured its business with a business insurance policy, it was able to cover the loss and continue with its business ahead.