Medical Malpractice

Employer's liability insurance comes in three different types. There is general liability, property insurance and worker's compensation insurance.

General Liability

If you have a policy for general comprehensive liability insurance, it covers you against anyone physically injury themselves or causing damage to property while on your business site.

This type of coverage is often purchased in company with property insurance (see below) for a more complete protection against any type of accident at the place where you usually operate your business or carry out business functions.

Professional Liability

For some business such as retail or food services, comprehensive liability coverage is likely enough. However, professional liability coverage is vital for many, including engineers, consultants, medical professionals and accountants.

Professional liability coverage protects a professional against claims of negligence or incompetence.

Sometimes this type of insurances is called 'errors and omissions' coverage, since it protects a businessperson in the case of a mistake or incompetence in carrying out his or her professional duties.

This type of coverage is vital for a professional. Claims for negligence or other omissions can be much larger than general liability claims, as evidenced by medial malpractice suits.

Property Insurance

Just as a homeowner must have basic property insurance, so too must a business. This kind of coverage is usually very straightforward.

With property insurance, your business is protected against theft or accident or any other loss of your business property. This coverage is in effect even if the equipment is not at your place of business when it is lost, damaged, or stolen.

Again, property insurance is similar to homeowners in that it covers in the case of fire or other disaster. You need to read your policy carefully to determine if it covers any flooding. That type of disaster is often excluded from coverage, as is water damage from sewer backup. Know your policy and add a rider if you think it is important to do so.

Usually property insurance is packaged with general liability insurance in a single package at a basic rate.

Worker's Compensation Insurance

Worker's compensation insurance is an employer's liability insurance that provides coverage for medical or disability claims by employees.

If an employee has an accident or a job related illness, they will file a claim under worker's compensation.

Each state mandates that businesses with even one employee provide this coverage, and most have pools to help small businesses cope with the expense. It can be expensive to own a policy, particularly if a former employee or employee has a claim.

The amount of a company's premium is based on a formula calculation. The formula takes into account the services offered by your company and the payroll each pay period.

Requirements vary for each state regarding how much you need to pay into the fund. Make the assumption that you will need to pay for each employee in your business, even though there are times that you as the owner and members of your family are exempted from workers comp insurance.

Depending on your state, you may be able to shop around for the best rates and service.