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Small Business Insurance Plan Fundamentals

Below are some legal foundations and general scope of coverage and operations liability exposures. This area provides the basis for a typical small business insurance plan. When you as a business owner, compare a small business insurance plan in the marketplace, you need to make sure that these fundamental coverage are included in your proposal.

1. Premises liability coverage.

This basic building block coverage provides protection from accidents that occur on the premises that are owned, lease, or rented by that person or organization that is insured. The coverage are typically protection from claims that arise from bodily injury and property damage.

2. Operations liability coverage.

This provides coverage from accidents that away from the premises and they arise from an individual’s and or company‚Äôs ongoing operations or services away from the premises.

Premises and operations liability is usually based upon negligence, but can sometimes be based upon contractual liability or strict liability depending upon the situation. An individual and a Corporation can be exposed to the other liabilities that are as a result of operations from autos, aircraft, watercraft, employee liability, etc., which are unique and distinct from the premises and operations liability. There are other insurance policies provide protections for these exposures.

3. Exposures from products and completed operations.

The best small business insurance portfolio should also include coverage from your exposures of products and completed operations. A small business insurance plan would have gaping holes in their insurance protection without this coverage being included also.

This coverage provides protection from claims that arise out of the products that you sell or distribute. This coverage also provides protection from the services that you have completed and/or work that you have done for your customers. Claims usually arise from the manufacturer, or the distributor, or from the retail sales of your product. Depending upon the products that you manufacture or are selling, you may have increased liability exposures it depending if your products or covered under the strict liability provisions that are in place in most state statutes.

Getting the best small business insurance coverage in place can sometimes be a challenging task. If you compare your small business insurance proposals and specifically look for this type of coverage in the quotes, you can prevent gaps in coverage.

This coverage will provide protection if your product was defective and causes bodily injury and/or property damage to third parties. Sometimes the coverage can be extended to provide coverage if the product has become dangerous that has not yet caused bodily injury or property damage.

Completed operations coverage provides insurance protection from your legal responsibility on the services that you have a provided and/or that you have completed. If your workmanship, the parts, and/or the services that you have performed become defective and cause bodily injury or property damage, the completed operations liability coverage will provide the needed protection.

In summary, a small business insurance plan should include the premises liability, operations liability, products and completed operations liability coverage. These are foundational coverage that should be reviewed by you and/or your risk manager. This simple checklist can protect you from uncovered losses in the future.

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