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Explanation of Kinds of Insurance

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Three liability terms related to insurance:

Personal Liability: FillInsurance coverage that offers protection in the event you are personally sued for accidentally hurting another person (s) or damaging their property. Personal liability helps to cover the associated legal costs and related damages.

General Liability: Coverage for an insured when negligent acts and/or omissions result in bodily injury and/or property damage on the premises of a business, when someone is injured as the result of using the product manufactured or distributed by a business, or when someone is injured in the general operation of a business.

Professional Liability: Legal obligations arising out of a professional’s errors, negligent acts, or omissions during the course of the practice of his or her craft.

If you are planning to open your own business and this business is at home, you will need to obtain proper insurance. Many people think that their homeowner insurance policies will provide coverage for their business automatically, but this is not true. Most homeowner policies provide only $2,500 in coverage for the business related property (i.e. computers and office related equipment, materials, etc.) located at the home and no business-related liability coverage. Yet, often for just a few hundred dollars a year, an endorsement can usually be added to the homeowners policy to protect the interests of a small home based business. If you find that your homeowners company will not add your business via endorsement, you will need to ask your agent about a commercial insurance policy called a BOP (Business Owners Policy). Because BOP policies have become increasingly more expensive in the past few years, you might need to speak to several local agents to be sure you are being offered the best policy and price.

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