Business-to-business (B2B) refers to companies whose clients are other businesses. These firms do not do business directly with individuals. Managing a B2B business involves a variety of risks. One way to reduce some types of B2B risk is by considering insurance coverage.
Working at the customer’s location
Many occupations require company staff to spend time at a client location. Contractors, (plumbers, carpenters and electricians) spend a great deal of time working in a client’s building. These professionals can purchase a general liability policy to protect against property damage or injury.
Say that a carpenter’s ladder falls at the customer’s office building and injures an employee. A general liability policy can cover legal costs and medical bills for the injured employee. If the carpenter damages some of the client’s office furniture, the general liability policy may cover the repairs or replacement cost.
Keeping your business running
Insurance can help you keep your business up and running. This article lists several types of insurance to protect a company’s assets. Assume that your business manufactures component parts for car engines. Your clients supply car engines to Ford and GM. To meet the needs of your customer base, you need to ship your parts on a timely basis.
Your firm might consider equipment breakdown insurance. As the name implies, this policy can cover the cost of repair, maintenance and inspection for your machinery and equipment. This policy can help you keep your business running- and meet the demands of your customers.
Errors and omissions
Sometimes, miscommunication or other unintended mistakes can harm the client.
If an engineer’s plans for a building project are misunderstood, for example, the mistake could cause the building to be structurally unsound. A customer may incur costs to remodel the building to meet local codes. Even worse, the structural problem may harm someone in the building.
The engineer can purchase errors and omissions insurance to help pay any legal fees or court damages due to an unintentional mistake.
Many insurance providers suggest a variety of types of insurance on their websites. Econtractorsinsurance.com lists several types of policies for the B2B industry.
Getting a bond before construction
A building project can be an expensive and time-consuming process for a company.
Nearly all businesses require a contractor to provide a bond before starting any project. A license and permit bond protects the customer, should the contractor not follow building codes and applicable laws. The bond also ensures that the contractor stay in compliance with the building contract.
Managing employee risks
If your B2B company hires employees, you may obtain worker’s compensation insurance. This policy pays for wage replacement and medical bills if a worker is injured on the job. Most states require that firms obtain a worker’s compensation policy, or pay into a state-run fund to cover this type of liability.
Finally, you want to consider an umbrella policy (also known as an excess liability policy). This policy can provide coverage when your other insurance policies have paid out their maximum dollar amounts.
Say, for example, that you have equipment breakdown insurance. A large number of machines incur repair costs at the same time. Your insurance policy pays up to the maximum amount for repairs. The umbrella policy can pay for addition coverage when other policies reach their limit.
Consider each of these types of insurance policies. They can help reduce the risk of managing your B2B operation.