Policies and coverage are important to ensure that the business is covered against the risks that may affect financial performance. such policies and coverage entail:
General Liability Insurance
The policy offers security to employees, products and business services against risks and injuries. The policy will also ensure that risks to employees and products are covered to minimize loss.
The policy and coverage protect office equipment, computers, inventory in case of the business experiences fire, vandalism, theft and smoke damage. The policy also protects the earnings of the business if the operations of the business are interrupted.
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Business owner’s policy
The policy and coverage cover the owner’s risks. The policy and coverage also include business interruption insurance, property insurance, vehicle coverage, liability insurance and crime insurance.
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The insurance mitigates the business risks for the small business by spreading the risks for the company making it. This enables the company to afford the cost of losses and risks the organization because the insurance firm is accountable for paying the risk or loss incurred by the company.
In addition, insurance allows the small business to transfer losses to the insurance company, so that the mitigation of risks in the organization. One of the limitations is that small business has difficulty paying premiums to the insurance company to cover the risk. Another is that the cost of risk mitigation is very high, making the small business unable to pay the cost.
This risk may be caused by fire and other unforeseen events that may cause the company to move or close. To mitigate this risk, the company must develop a recovery plan that includes insuring the company against business disruption.
This risk should be mitigated because the company requires its property be protected from unexpected events.
Theft and pilferage
This risk makes the company lose its valuable resources thereby affecting the financial performance of the company.|
The risk if not well mitigated will result in the company into high treatment costs which in turn may lead to low productivity in the organization.
Costs of policies annually
The annual cost of overall liability is between $ 400 and $ 900. This implies that it is the amount that the insured must pay the insurer so that the company is covered by the risks. The annual cost of ownership policy is $ 1,281 is the amount that the small business must pay to secure its property against the risks. Finally, the annual cost of the business owner’s policy is $ 500. This amount is applicable for both smaller and larger businesses, and it used to guarantee the owner against unforeseen events.
The source of property policy is a disaster that disrupts the operations of the company which in turn may make the company vacate the premises. General liability policy, on the other hand, comes as a result of increased unforeseen risks on the property and owner of the business that affect the financial performance of the company negatively.
Business owner’s policy source is increased illegal issues in the company that makes the company to incurred losses. The policy can be obtained by filling the form indicating the items to be covered in the policy. Point-of-service plan because the plan requires one to get a referral from primary care doctor to see the specialist. The annual cost of that plan is $1,500.