Why Testing Laboratories Need Insurance
In this industry, the establishments provide different kinds of testing services. Examples include calibration and certification testing, electrical testing, environmental testing, fire insurance underwriter laboratories, food testing laboratories, forensic laboratories, geotechnical testing, hydrostatic testing, and industrial testing laboratories services. This industry does not include medical and veterinary testing laboratories.
Testing laboratories offer a broad range of testing services including food, electrical, and environmental, calibration and more. No matter what unique testing service you offer, buying insurance is one of the most important responsibilities you handle. Making sure you buy the right insurance to protect your testing laboratory is the best way to protect your business from severe risks you face every day.
What Types of Coverage Do Testing Laboratories Need?
Testing laboratories need a number of insurance policies to protect their business. If you work with hazardous materials, you need to consider pollution liability. If you work in hydrostatic testing, it is important to have coverage for explosions. Here is a list of insurance policies to consider:
- Errors & Omissions: Protects your laboratory by paying damages related to your oversights and mistakes while performing testing services.
- General Liability: Pays costs associated with property damage or bodily injury to a third-party individual or company.
- Commercial Property: Pays to rebuild business owned property damaged by a covered event like fire or explosion. You can also add business interruption insurance to reimburse your expenses and lost income if you have to close temporarily.
- Worker’s Compensation: Pays costs associated with work-related injuries and sickness. If you don’t have a work comp policy, employees can sue for medical expense and lost wage reimbursement. Most states require work comp once you have three to five employees.
- Inland Marine: Especially important if you travel for testing, this policy protects goods and property in-transit.
- Pollution Liability: Protects against claims involving pollution accusations including property damage bodily injury to other parties. It also pays costs to clean-up the hazardous materials according to mandated government laws.
What Risks Do Testing Laboratories Face Daily?
- Testing Mistakes: Customers rely on you to thoroughly test their products and services. From time to time, an important testing component can be missed. Whether you failed to catch a quality issue or made the wrong recommendation, customers can hold you financially responsible for an adverse outcome.
- Hazardous Waste Spills: Some testing laboratories handle hazardous materials like chemicals or potential pollutants. These materials require special handling. If they spill, you face government fines, in addition to properly removing the materials and fixing other damages it causes to the community.
- Employee Injury or sickness: Employees are responsible for carrying out the everyday testing which means they handle food, chemicals, and products. If an employee has an allergic reaction or injures themselves in the process, your laboratory is responsible for medical expenses and lost income.
- Explosions: If you handle explosive materials in your testing laboratory, there is a risk of explosive fire that can destroy business property.
- Damage to Other’s Property: Today, many testing laboratories take their services on the road and provide onsite testing. If your employees or testing causes damage to a customer’s property, you are responsible for replacing or fixing it.
This does not list every risk that you face daily. Many testing laboratories also risk auto accidents, employment practices claims, and several others depending on what testing services you provide. Buying insurance is too important to skip. It is the only way to completely protect your business assets and reputation.
Insurance for Testing Laboratories Cost
Insurance cost is different for every testing laboratory depending on your specific services and the carrier you choose. Carriers look at your experience, past claims, and how risky your testing industry is to calculate costs. Request a free insurance quote today by completing the form below.
What type of insurance does this industry need?
- This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.
- This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity. Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
- This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.
- This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to an error or omission on your part. Your business may have contracts with clients or partners that require E&O coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, E&O coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
- Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.
- This insurance protects the business in the case of any incidents involving a vehicle that has been hired by the company to be used for business-related purposes. It also provides coverage in the case your business uses other vehicles which are not property of the business, such as having delivery drivers use their own vehicles. If your company hires vehicles or allows employees to use their own vehicles for business purposes, you will want to consider this insurance.