Posted on May 16, 2014
You work hard to build your business into a successful and profitable venture. But what happens if someone files a lawsuit or a fire wipes out vital business inventory?
With appropriate commercial insurance, Arkansas business owners don't have to worry about potential disasters, customer injuries or even false advertising claims. Having the right business insurance provides all the needed coverage to handle whatever claims may arise.
Unfortunately, uninsured companies face the risk of paying out of pocket for a host of various expenses associated with injury or property claims. Without significant amounts of cash on hand, they face financial hardship and potential closure should courts award compensation in a lawsuit. This can be avoided simply by evaluating the different business insurance coverages available and finding the right ones to provide the most protection while also meeting company budget needs.
Arkansas Liability Coverage
No matter the industry or type of business, every company needs the protection of general liability insurance. This valuable coverage provides protection to business owners from injury or property damage claims. When a company is financially responsible for injuries to a third party because of their products, or from damage caused to a customer's property by an employee, liability insurance will pay the cost of legal defense, medical expenses and any judgments or settlements determined by the court to the injured party.
Without appropriate and adequate amounts of liability insurance, a company faces potential out of pocket expenses that can be financially devastating. Because medical costs and legal expenses can build quickly, liability coverage gives essential added protection from risk.
Workers Compensation Coverage
Arkansas employers with 3 or more employees are required by the state to have workers compensation insurance. Workers comp pays benefits to employees who are injured or become ill while on the job. Employees will receive wage benefits to replace lost income, medical expenses and disability payments if eligible.
Exemptions from Arkansas workers compensation requirements include agricultural labor, domestic workers as well as employees of nonprofit, religious or charitable organizations.
Having commercial property insurance gives added security to business owners. They know that should fire, theft, wind or disaster strike, their building will be repaired or replaced up to the policy limits. Determining the value of business property is the first step in securing accurate figures for the actual amount of insurance needed. Companies need enough coverage to take care of replacing buildings should they be completely destroyed. Property insurance will also cover business personal property such as inventory, furniture and equipment. Therefore, calculating the value of these goods will further help business owners assess the amount of insurance needed for full protection.
For companies that use equipment off site, inland marine policies will insure equipment during transport and also while it is being used in locations other than the business premises.
Commercial Flood Insurance
According to the Federal Emergency Management Agency (FEMA), a large majority of Arkansas residents do not have flood insurance despite the fact that there have been 24 presidential declarations of disaster in the state involving floods. Arkansas business owners put their livelihood and business property at risk by not obtaining commercial flood insurance for their companies. Flooding cannot be prevented, but the devastating financial effects can. Companies may purchase flood insurance through the National Flood Insurance Program. This coverage will provide up to $1 million of protection for commercial properties - $500,000 for structures and $500,000 for building contents. Business tenants are also eligible to apply for contents only coverage that protects their business inventory and equipment. With a 30 day waiting period for flood policies to go into effect, planning ahead and purchasing prior to flooding is the best course of action for everyone.
Tornado Insurance for Arkansas
Arkansas is privy to all sorts of inclement weather, and tornadoes are no exception. In fact, the National Weather Service estimates that there has been a 26 percent increase in tornado activity in Arkansas between the years 1971 and 2000. Business owners can be prepared for potential wind and tornado damage by making sure all their insurance policies are in order. Most commercial insurance will cover damage by tornadoes and windstorms, but it is always a good idea to verify that existing policies have the coverage. If tornadoes are not mentioned in the policy, then make sure to have an endorsement added so this valuable coverage will protect business buildings and property.
Earthquake Insurance in Arkansas
Given the fact that Arkansas is situated on the New Madrid Fault Zone, and that much of western Arkansas felt the shaking from the 2011 Oklahoma earthquakes and aftershocks, many business owners have already started the process of investigating obtaining this coverage. The ideal time to purchase earthquake insurance is before an event happens.
Earthquake insurance must be purchased separately as it is not included in commercial property coverage. At present, it is relatively inexpensive to add this coverage to existing policies for the peace of mind it provides. Should an earthquake cause property damage, cracking or broken pipes, this coverage will pay to repair or replace the insured property.
Additional Information on Arkansas Insurance