Pros and Cons of Taking Commercial Insurance
Commercial insurance (in Denmark we say erhvervsansvarsforsikring) is something that all businesses should consider getting. There are a number of benefits to taking out this type of insurance and it could mean the difference between your company remaining financially afloat and having to close down. However, there are downsides and not all companies will need to take out business insurance. These pros and cons need to be considered in detail.
Protect the Business Assets
The first benefit is that the commercial insurance will help to protect the assets of the business. This will be anything financially valuable that can be used when there is a claim. Not all businesses will have a lot of assets and it could lead to the cost of the insurance being more than the amount that could be claimed; this is something to consider.
Something to look into is the amount that a person could be claiming. Anyone who is injured or becomes ill due to the workplace will have a right to sue the company to help cover the cost of their medical bills. However, if the bills are more than the assets then the person will not be able to gain the financial compensation. If the assets are more than the bills, then the person will usually be granted their claim; this is when the insurance is more than worth it.
Get Legal Help
Another benefit of taking out commercial insurance – with some companies – is the fact that legal aid is also offered. This will often help to cut the cost of legal fees as you will only need to hire a lawyer when it comes to dealing with the legal matters; you will be able to contact your provider to find out whether the third party really does have the legal case that they are threatening to bring. This helps a number of businesses avoid any settlement cases or court cases and extra fees.
Not all insurance providers will offer this – they may not have the capabilities to offer this. This is something to look into when it comes to taking out a policy to make sure that you get exactly what you require.
Are the Annual Premiums Worth It?
It is important to decide whether the annual premiums for the commercial insurance are actually worth it. This will involve looking into the assets that the business has and also the nature of the business. Sole-traders and those who work from home are less likely to need business insurance as they are less likely to have a permanent place of business outside of their home and less likely to have people coming to their place of business if they do have one. This will mean that the risk of injury or illness is much less and may make the premiums a waste of time.
Like anything, there are pros and cons to considering to take out commercial insurance. This is something that you should look into when you first start up the company as you never know when an accident could strike.
For the top 5 commercial insurance tips, go here.
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