It’s not really possible to plan for some business losses. Things like robberies, tornadoes, and fires are, by their nature, unexpected. But if you own a business, you can take measures to avoid certain kinds of losses and buy insurance to help recover from some kinds of setbacks. That’s why commercial (business) insurance is a must for anyone who runs their own company.
Theft
Theft is the most common loss reported by business owners to their insurance carriers. This category’s dollar-value losses are about equally divided between theft by employees and by customers. It’s one of the costs of operating a company, unfortunately, and is very hard to prevent or accurately measure. Many large retail entities, for example, lose millions of dollars every year to theft by customers and what accountants call shrinkage, or theft by employees. Industry-wide, economists say that retailers in the U.S. lose about $14 billion each year to shrinkage and about $12 billion to customer theft.
Water and Storm Damage
Another common loss reported to carriers is storm and water damage. Water is an especially pernicious destroyer of building foundations, standing structures, equipment, and inventory. In fact, a large part of fire losses is due to the spraying of water to extinguish blazes, not the fire itself. In any case, water and storm damage is a routine way that companies lose entire storehouses of delicate products or suffer structural damage on a large scale.
Firms with large warehouses and multiple office structures need this type of protection just to stay in business. The cost to repair or replace a building can be prohibitive even for large organizations. That’s why few corporations open their doors before their commercial insurance policy has been thoroughly reviewed and paid up for the year.
Injured Customers
If a customer slips and falls on your property, you’ll need commercial coverage to protect your financial health. Even a single incident can bankrupt a small company unless there’s a policy in place to deal with the loss. Even if your firm has no public space where customers routinely roam, you’ll need product liability coverage in case a customer is injured by one of your products. Likewise, if one of your employees causes injury to a customer or a member of the public, in a car accident involving a company vehicle, for example, commercial insurance is a must.
Review Policies Every Year
Insurance experts say you should review your commercial business policies every year, or more frequently if there are significant changes in the way your company is structured or run. The entire review process is quick and painless. Most agents can visit your office or simply speak with you over the phone and go over all the provisions of your policies in under a half-hour. Common policy changes include adding or removing vehicle coverage, increasing or decreasing liability limits and more. Keep a fixed date on your calendar each year to contact your carrier and review all the important provisions of your coverage.
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