CFP

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Analysis and Evaluation of Risk Exposure - Business Related Risk Exposures

Commercial general liability, commonly thought of as the "slip and fall" coverage, insures a business against accidents and injury that might happen on or away from its premises, as well as certain exposures relating to the carrying out of its business operations.

It protects the business owner from payments for bodily injury or property damage to a third party, for medical expenses accruing to the underlying incident, for the cost of defending lawsuits including investigations and settlements, and for any bonds or judgments required during an appeal procedure.

Home-Business Liability
With so many people now working out of their homes, it's worth noting that the liability coverage on your homeowner's policy may not apply if a customer or messenger is injured on your property. And since a standard homeowner's policy comes with only a limited amount of coverage for business equipment, usually up to $2500, those who work at home should consider supplementing their insurance.

Business risk exposures to consider:
1) General Liability
2) Errors and Omissions
3) Director & Officer protection
4) Business Overhead expenses
5) Employee Group Benefit plans

Some might argue that employee group benefit plans are not necessarily a risk exposure. But picture this: Suppose its common practice in your industry for a business to offer health/dental insurance as well as 401k participation to its employees. If a firm within that industry has taken the position that they are not going to provide these benefits to employees, the firm has now exposed themselves to the recruitment risk of competitor firms bidding for their top employees with more attractive compensation & benefits packages.

Coverage of these business risks will be discussed in more detail in the chapter that follows.

Introduction to Personal Insurance
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