If you are a new business owner, it is not always obvious what business insurance is required by law. The truth is that the laws governing small businesses in particular are rather different to those of larger companies. Depending on your location, there may be many differing regulations regarding what business insurance is required. Of course, the best way to find out what you are required to carry is to speak with a business lawyer or attorney who can help guide you through the waters.
What is considered a “passive” instrument in the eyes of the law? An example of this would be a building which has the amenities and interiors built into it and which is used only for business use. This is often considered to be a passable or non-dominant instrument. In order for your business to be considered non-passable, it is essential that all of the required equipment to be present as well as a substantial amount of cash on hand.
Another example of what business insurance is required by law would be liability insurance. Liability insurance protects a company against claims that result from an injury or damage being sustained within the business. The type of claims that are covered under this policy will vary depending on the policy. Some examples include slip-and-fall accidents, defective products, lawsuits based on false advertising and assault charges. If your company is sued, you will want to make sure that you have adequate protection. The amount of coverage provided will also depend upon the policy itself, as well as how much you plan to pay on a monthly basis.
What about workers' compensation? This is a frequently asked question by what business owners do not understand when they start looking into insurance policies. Workers compensation is a type of insurance designed to protect an employer from paying for the medical expenses and lost wages of an employee who has been injured on the job. The employer will be responsible for making payments to the injured employee's family, as well as providing them with financial assistance for medical and rehabilitation expenses. These expenses can exceed what the employees' take home each week, making the payments nearly impossible to cover on a cash basis.
The final piece of what business insurance is required by law you may be wondering about is industrial liability. This protects a business from a number of different situations which could potentially harm or create a risk to employees, customers, or property. Some examples of events that could constitute industrial liabilities include: explosions, toxic chemicals, disease, slips and falls, litigation and negligence. A good policy should protect you against any of these events.
While some businesses choose not to purchase business insurance, others consider it a necessity. No matter what type of business you own or run, if you want to continue operating in a safe and legal manner, you will want to invest in the best insurance coverage possible. You may even be surprised at just how much you could save with a little business insurance!
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