Product liability insurance is needed by businesses that make or manufacture products, by businesses who import or distribute products, and by stores that sell products to consumers. At first glance, it is easy to see why a manufacturer would need liability insurance in case a product that they make is flawed during the manufacturing process or is found to be hazardous due to the faulty design of the product. However, importers, distributors, and retail stores also need a policy to cover liability as well.
The theory on who needs product liability insurance is best seen in a recent pet food recall involving the country of China. China made tainted pet food that was imported by a Canadian company with two physical US locations. The Canadian company supplied the US Wal-Mart stores with the tainted pet food that was then sold US consumers. Many pets died from the tainted pet food that was sold by Wal-Mart and these unhappy pet lovers started to sue for product liability damages through their US court systems.
Product liability insurance is needed by a manufacturer, unless that manufacturer is outside of the United States realm of control. The pet lovers could not sue the China manufacturer for damages, and even if they tried to sue in China, there is no easy way for a United States citizen to collect court orders damage money from another country.
Product liability insurance is needed by importers and distributors. The Canadian importer was from out-of-country, but did have two locations within the United States that were under United States control. The Canadian importer/distributor could be sued by the pet lovers.
Product liability insurance is needed by retail stores when they sell products. Wal-Mart had many lawsuits placed against them by the pet lovers for selling the pre-packaged food that killed their pets.
As is seen in the above example, the pet owners had the right to completely ignore the manufacturer in China who was the prime culprit in favor of suing the easier people to get to. Product liability laws in the United States can hold all people who come in contact with faulty products responsible to pay for damages if a consumer suffers injuries that are brought about by a faulty product. Product liability insurance is a necessity for all sizes of businesses that deal with consumer products in any manner. Injury claims in court often result in large amounts of damage money being awarded; this can ruin your business.
Product liability insurance is a necessity for businesses that make, distribute, or sell items to the public. What happens when a member of the public suffers personal injury or other damages when a product malfunctions is that they sue the manufacturer, the distributor, and the store that advertised and sold the product to them. A court may release one of more of the entities being sued from responsibility, but insurance is still needed to cover the costs of being found innocent.
Today, juries often award very large claims on product liability cases while sympathizing with the person who has been injured. Juries are made up of common citizens who may feel that the child who cut their finger on a defective toy looks just like their own grandchildren while deciding on how much money to award to the child's family. Product liability insurance covers the unforeseen lawsuit traumas that can occur if a product does not live up to consumer expectations.
Product liability insurance is also needed by businesses that make, distribute, and give away items to the general public. All health and safety standards must be met on free items in the same manner as those that enter the public through a price-tag. Factory seconds that are unsafe for a consumer to use are not appropriate items to sell at a discount or to give away. When a product is unsafe and damages occur, somebody (manufacturer and distributor) will be recruited to pay for damages in court.
The actual risk factor for stores to be involved in a situation that requires a product liability insurance claim are not as great as those of the product manufacturer and distributor. However, businesses and lives are ruined everyday as unhappy consumers file damage claims in court and the businesses involved are not covered by the necessary policy needed to cover the expenses caused by the claims. In the worst case scenarios, small business owners become personally responsible for damages.
When it comes to liability, it is far better to be safe and have the insurance coverage than to be without it. Very tiny flaws that do not show up on normal product safety checks can be enough to cause a manufacturer thousands of dollars in damages that they will be required to pay for. All businesses that make, distribute, sell, or give away products to consumers need to check on their options for a product liability insurance policy with an experienced insurance supplier.
One size of insurance policy does not fit all. Manufacturers, distributors, and store owners all need different types of insurance to protect them from claims made against product manufacturing flaws, product designs that are unsafe, and improperly perfected product warning labels. Product liability insurance is designed to pay for expenses if a consumer, bystanders, or their property suffers any damages from a product.
Product liability insurance is sold to businesses based upon their specific activities and the number of products that are entering into consumer possession via their care. Some types of products have a higher rate of court actions than others, and these categories will often be assessed as needing a higher value of insurance. Examples of higher risk categories include: children's toys, all medical, prepackaged food, and all areas of the sports and automotive industry.
The only way to judge what a product liability insurance policy will cost for your manufacturing business, distributorship, or store is through a careful assessment of your product participation through a highly qualified insurance agent, and possibly through your attorney as well. Awards for product liability injury or death cases are often extremely high, and based upon a jury sympathy level. Insurance premiums are not inexpensive for higher risk businesses, but it never pays to cheat in order to bring costs down.
A very common method of bringing the insurance premium rates down is through under-reporting of product production or sales. Unfortunately, this user-trick is very well known and can only cause problems if the product liability insurance must ever be used to pay expenses on a claim. For product manufacturers and distributors, if a recall happens for a given product, and insurance reporting has only shown a part of that stock to be in existence, the insurance company can refuse services when they are needed the most. Manufacturers and distributors must always be very honest on the product reports.
Currently, there is a group attempting to lobby for fairer product liability laws to be placed upon the books for the United States, but until these new laws become a reality, all manufacturers, product distributors, and stores carrying products must take steps to protect themselves through buying a product liability insurance policy. When consumers go to court to discuss damages that a product has caused, they will almost always name the manufacturer, the distributor, and the store that sold the product on the lawsuit.
Personal car insurance and business car insurance are necessities in our daily life. Many differences align the two and the price varies as well. When it comes to personal and business car insurance, there are some distinct differences.
If you are not looking to increase your rates, you will first need to get the driving record of any applicant that applies to your business. This protects you as the owner. You do not want to hire someone for the position only to find out their driving record is less than perfect. In fact, you might not be able to add them on to your policy at all. Then, this employee you hired only becomes a drain on production. Unlike personal car insurance policies where you are only responsible for your household; business policies are more risk and the employees do not always have your best interest in their thoughts.
The flexibility of the business policy far outweighs the personal car insurance policy. This is because you have different circumstances that arise in business. A business usually deals with expensive items and carries certain items. During this time, they are responsible for it. If something happens, they have to pay up. This is business activity and not personal. A business policy is necessary.
Keeping track of gas and miles seems like a daunting task, however, it is a business necessity. It is very important that you distinguish which miles were used for personal use and which were used for business use. This helps on all fronts and is often tracked using a computer based model.
Keeping business use and personal use separate is always the recommended path. Most people find that their business use is very limited and do not see the reason why they should take out a separate business insurance policy. Although this may be logical, you need to make sure your bases are covered. This means that if you choose to use your personal car insurance policy for business use that is limited, you will need to inform your car insurance agent of this change so they can adjust your policy to cover it. They can find cause to deny your claim if you are found to be using your vehicle for business purposes that were not defined in your policy.
Realtors, Regional Directors and salesman all fall into the classification of often forgetting to note they use their car for business use. This is because some people have a road block do to the fact they do it every day. Any time a person drives to a meeting, property or a house or business for a potential sale, they are using their car for purposes that constitute business. This is the type that needs to be noted under a personal policy.
Never be challenged later down the road with not having adequate coverage or being denied a claim because you did not inform the insurance company of your situation. Talk to an agent and get the best deal.
If you’re the management consulting business, you probably have clients that require you to carry some level of insurance. Maybe you run a small firm with a few employees, or maybe you're an independent freelancer. Either way, you might wonder if you'll ever actually use all that coverage.
If your client says it's necessary, you will need to obtain professional liability insurance if you want to secure the job. The good news is that getting the required insurance coverage can be both affordable and good for your business.
Typically, companies want their management consultants to carry some or all of the following three types of coverage:
General liability insurance
General liability insurance covers businesses in the event of an on-site injury or damage to company property. Management consultants often wonder whether they really need this type of coverage. After all, what's the likelihood that someone giving a presentation or attending a meeting will damage a client's property or hurt anyone? Is there really a risk of liability for management consultants?
The fact is, client companies often require all of their vendors who may come on-site - from electricians to delivery personnel to management consultants - to prove they carry general liability insurance. In some cases, the mandate comes from the client's investors, who seek to reduce the company's risk of financial losses from lawsuits. And of course, accidents do happen, so there is as much risk of liability for management consultants as for any other office visitor.
If you have your own management consulting office, general liability insurance will protect you in the event of an accident or injury on the premises. If a client visits your office on a rainy day and slips and falls in the entryway, your general liability insurance will cover any related medical or legal costs - and possibly save your client relationship. And that's one invaluable reason why insurance for management consultants is good for your business.
Professional liability insurance
Professional liability insurance, also known as errors and omissions or E&O insurance, is essentially malpractice insurance for management consultants. It covers you for errors and omissions that you or your employees make on the job. There's a simple reason that clients require E&O insurance for management consultants: They know that people make mistakes.
Your client's greatest risk in bringing you in as a management consultant is liability -- the fact that your mistakes could spark a lawsuit or financial loss. For example, let's say you have revamped a company's budgeting process, but made a critical miscalculation in the new system that results in big problems when the budget is reconciled with actual expenses later in the year. Your client can claim that any resulting financial loss is due to a management consultant error or omission, and will expect you to compensate the company.
Having professional liability or E&O insurance for management consultants is a good idea. Without it, you could end up paying exorbitant legal defense costs if your client makes a claim against you. A misunderstanding is often all it takes to be served with a lawsuit. Once a client alleges that you were negligent and communication breaks down, your legal expenses start to grow. E&O insurance gives you peace of mind that should things go wrong, you're covered.
Workers' compensation insurance
Some states require workers' compensation insurance, while others do not. If your client is based in a state that requires it, your management consulting firm will likely be asked to carry it, even if your own home state does not require it.
That's because, in some states, if you're injured while on the job, your client must cover you with its own workers' compensation policy. Also, in some states, your client's insurance carrier will require the client to cover all contractors that don't have their own proof of coverage. Both scenarios increase your clients' premiums, so they often require workers' comp insurance of management consultants as well as other contractors.
Workers' compensation insurance covers medical expenses as well as disability and compensation in the event of on-the-job injuries. If you're a solo practitioner with your own health insurance, workers' compensation insurance may not be necessary - but your client may still require it if you want to get the work.
If your management consulting business has employees, protecting them with workers' compensation insurance just makes good business sense. From carpal tunnel syndrome to a slippery bathroom floor, even the smallest on-the-job hazards could result in an injury that could take them off the job. Workers' compensation insurance ensures that your employees are taken care of and saves your company from paying for their ongoing care.
All building contractors working in North Carolina who carry either a NC general liability insurance policy or a NC workers compensation insurance policy, or both, probably know that these insurance policies are subject to an annual audit. What few contractors understand is that they have the power to stack the deck in their favor when it comes to that audit. And since some of the audit process is subjective, this can mean money in your pocket if you are a building contractor. Here are 5 tips that will put you on the road to more successful insurance audits.
Let me start by emphasizing that insurance auditors are people just like any other. If you grease the path for them and make their job easier, then they are much more likely to cut you some slack in the audit process and this can end up saving you a lot of money. So, what are those 5 tips?
Tip # 1 - Have Those Insurance Certificates Ready. I just can't preach this enough. Do not allow any subcontractors on to your job site until they have provided you with a current certificate of insurance. And more than that, be sure that the limits on their general liability insurance policy are at least equal to your own policy limits. And if you have a workers compensation policy, make sure that their certificate shows that they have one as well. Last of all, check the policy dates on the certificate to be sure that they are current and active. If any policies will run out while these subs are still on the job, make sure that you also obtain an updated certificate. Put copies of all of these certs in your audit file. If the auditor shows up at your office and you don't have your certs ready, he will charge you for the subcontractor payroll and leave it up to you to fix it later. And usually, fixing it later takes a lot more of your time.
Tip #2 - Take Some Time To Study Your Classifications. First of all, take the time with your agent to understand all of the classifications on your general liability insurance policy and your workers compensation insurance policy. Make sure that you understand the nuances of each class code and that your policy is set up accurately. If you are going to fudge the gray area between two similar classifications, understand that you might not get it past the auditor and you should have funds ready should you fail.
Tip #3 - Have The Audit Done and Ready To Hand Over. Once you have done your homework on your classifications, set up a spreadsheet to dump the payroll for each employee each week into the correct classification. You will want to keep a spreadsheet for both the workers compensation and the general liability policies. If you have done this correctly, you will be able to hand that spreadsheet over to the auditor and essentially all of the auditor's work is done. This is more likely to keep them from digging around in your books to find new problems to share with the underwriters that can cost you in increased premiums.
Tip #4 - Keep The Overtime Payroll Separate. The NC workers compensation insurance policy allows you to avoid paying premiums on the extra overtime pay. But, to keep from paying work comp rates on this payroll, you must have it segregated. I suggest that you add a column on the work comp spreadsheet that you are keeping to show the amount of payroll that is overtime bonus and deduct it from the total payroll for each classification.
Tip #5 - Always Schedule the Audit for Friday Afternoons. This one may sound a little goofy but it works. If the auditor shows up at your office on Friday afternoon, and you can put all the information in his hands with up to date spreadsheets and copies of all subcontractor certificates, then he is more likely to accept your figures and get on home for the weekend. The less time he spends digging around in your books and your operations, the less likely he is to find a surprise that the underwriter doesn't like which means higher insurance costs for you.
Most building contractors have a vague idea of when their audit is coming up and some even have a general idea of whether they should be expecting a refund or an additional premium due after the audit. But those that prepare carefully for the audit process, can turn it to their advantage to reduce their overall insurance costs and have their own cross check against the insurance company's audit report. Don't let the insurance company sweep you along; be actively engaged in the audit process by being prepared and proactive. In the long run, this will save you money on your insurance costs.
When you own and operate a small business, you need to be responsible and accountable for it. You may be operating it with utmost care and give your employees and your customers the best quality and services but some will still see it as you're doing something wrong.
It is only practical to get small business liability insurance in order for you to be protected just in case something you don't want to happen actually happens. By learning what all successful business entrepreneurs are aware of, you get to protect your business too.
One of the most often asked question is "who needs small business liability insurance?" To give you a background, 78% of American businesses are structured through some kind of partnership or sole proprietorship. The remaining percentage means that these are the small businesses.
The owners of these businesses must have some kind of ownership to protect their enterprises and to make these less risky as possible. The liabilities of any business are constantly challenging the business owner so he must be smart and have small business liability insurance.
There is an ongoing misconception on limited liability companies or incorporated companies. This is that the business owner is protected from it or personal insurance. This is not usually the case.
The business owner can be personally liable if he has signed a guarantee for the loan, injured someone first hand, have acted illegally or irresponsibly, or does not operate the business as an entity which is supposed to be separate.
So now that business owners are interested about getting small business insurance, they need to know exactly what it is. Well, for one, it protects the small business just in case there is lawsuit for property damages or personal injuries.
This will cover the damages and the legal costs. The small business liability insurance depends on the kind of business needs that the company provides. It can also be purchased in different forms.
When buying small business liability insurance, the owner must know the kinds that are available out there. Here are two examples. There's the General Liability Insurance. This is the kind of business liability insurance that mainly covers and protects the business from advertising claims, property damages, and injury claims. This is generally known as the CGL or the Commercial General Liability.
The next is the Professional Liability Insurance. This is for business owners who provide services that have to be considered in order for these to be protected against negligence, errors, malpractice, and omissions. It depends on which industry the business is in.
