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When one has succeeded in getting his company started, business insurance becomes a necessity, and in some areas, is a legal requirement. For most company owners the only question is what type of policy to purchase and how much coverage is necessary. A company owner should never operate without coverage because one lawsuit can force a company to liquidate.
A transportation company will have to have auto coverage because the employees are traveling on the highway. The goods that the company transports will have to be insured against damage while in transit. Each employee driver will have to have liability coverage.
A restaurant owner will have to have liability coverage so that if a customer gets sick from food poisoning and sues for damages, the owner will not have to pay for damages out of pocket. The same is true if a customer slips on a piece of food on the floor and is injured. A general liability policy will cover all foreseeable injuries the restaurant patrons could experience so that the owner will not have to pay for damages out of company proceeds.
A general liability policy covers accidents caused by employee negligence. It is a basic policy that provides adequate coverage for most small companies. The premiums for a general liability policy are the least expensive of any of the company policies. However, if a company deals directly with the public, or if the company produces products for consumer use, then a more specific policy should be purchased.
The policy will pay not only for damages, but also, for legal representation. Lawyers are expensive and some charge more than two hundred dollars an hour. But the company owner can count on his policy to pay for a portion of, or in some cases, all legal expenses. The insurer usually chooses the attorney who will represent the insured.
There are many companies to choose from, but it is best to choose an insurer that has been established for many years and has a good reputation. Compare policies and rates before choosing a company because there are differences. It is a good idea to seek the advice of an objective agent, one who is not trying to make a sales pitch.
When one has succeeded in the difficult task of starting a company, business insurance becomes a requirement. For most small company owners, a general liability policy suffices. Larger companies need a more specific policy to protect the company from lawsuits.
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