As a business owner, you have relationships with vendors, consumers, contractors and subcontractors.
In some cases, these relationships have contracts attached. With business liability an issue for companies small and large, agreements about who assumes the risk for certain situations are more and more common.
A savvy business owner realizes the importance of negotiating strong contracts. This helps you and other parties share some of the risks associated with the business deal.
Consider some of the information about risk transfer that can help you with contract negotiation. You can be content that you are making smart insurance decisions too.
- Insurance is a form of risk transfer – When you buy different business insurance policies, you are moving some of your risk to the insurance company. Insurance is a great way to take some of the hazards of operating your business off your shoulders.
- Contracts are vital – You can accomplish a transfer of risk through contracts. An example is if you hire someone to fix your roof. As part of the contract, they agree by law that their workers are all insured against accident or injury on the job. This protects you from financial burden if an accident occurred.
- Consider layers of protection – If you have significant risks, layers of protection is crucial. One example of this is if you have business insurance on your property. However, you might need to purchase additional flood insurance. This can help you make certain that if a flood occurs, you will not be liable for damages. Standard property insurance generally doesn't include flood coverage.
- Indemnification clauses – One of the most powerful forms of risk transfer is the indemnification clause or hold harmless clause. In this case, you have a customer, vendor or contractor agree to hold you harmless if something goes wrong. In this case, a rock solid contract can assure you correctly transfer risk.
Remember, even if you have contracts where you are transferring certain risks, proper insurance is still a must. If you have any questions or concerns about your current policies, discuss it with your insurance agent. This can help you avoid making a costly mistake.
We've got you covered. CSP Insurance Services can help you get the Florence SC business insurance you need for your contracts. Call one of our agents at 843-519-2557 for more information.