Running a business can be an expensive undertaking, even when you are well established and drawing in a good profit.
Employees, overheads, stock, and legal requirements can all add up to a significant sum, and it is easy to get overwhelmed.
One essential product you will need to get sorted is business insurance—this is an essential aspect of running a business, and failing to secure it can have serious consequences.
Types of Business Insurance
There are as many different types of insurance as there are businesses, so read on to help you make your choice.
General Liability Insurance
No matter the size or scale of your business, you need to make sure you are covered with general liability insurance.
If you, your product, or your employee are alleged to have caused property damage or bodily injury to a third party, this insurance will protect you.
If you own the building where your business is located or have equipment such as computers, tools or other office inventory, you need to secure property insurance.
This coverage will help protect you against theft, vandalism, fire, smoke damage, and other destruction. Some policies will also include loss of earnings or business interruption insurance to help protect your profits if you can’t earn.
Business owner’s policy (BOP)
This coverage will protect you for all your business needs, including property insurance, interruption insurance, liability insurance, crime insurance, and vehicle coverage.
You can create a flexible package, tailored to the needs of your business, and exclude aspects which will not benefit you. This type of plan can help you to save money, compared to taking out all the plans individually.
Commercial Auto Insurance
If you have a vehicle as part of your business, commercial auto insurance is essential. It protects any vehicles which carry your employees, products or equipment, and can protect cans, trucks, SUVs, and cars from damage.
If your employees drive their personal vehicles to work, you can also benefit from non-owned auto liability. This option will protect the company if the employee has inadequate personal auto insurance coverage.
Workers comp will provide full compensation to any worker who is injured while on the job.
It includes medical benefits, wage replacements, and other benefits if your employee is injured in the workplace, and is offered in exchange for a guarantee that they will not sue.
This fact makes it essential to protect yourself and your business from any legal issues or complications and is a requirement in several states.
Professional Liability Insurance
Also known as errors and omissions insurance, this policy will protect you from failure to render professional services, or if this is carried out incorrectly. General liability will not protect you here, so it is critical to add the professional element.
It is a must for any professional firm, such as accountants, lawyers, real estate agents, consultants, notaries, insurance agents, technology providers, and hair salons.
Directors and Officers Insurance
As the name suggests, this policy will protect the directors and officers of a company against any actions they undertake which affect the operations or profitability of a company.
Should such a person find themselves in a legal situation as a direct result of their actions at work, this policy will cover damages or costs incurred as the result of a lawsuit.
Data can be very valuable, and this is crucial if your business stores non-public or potentially sensitive information about your employees or clients anywhere on servers, computers, or paper files.
Protecting this information is imperative, and if a breach occurs, the legal ramifications can be catastrophic. A data breach policy will help to protect your business against the loss.
Homeowners insurance is an essential policy and protects you against any damage to your home, or items which are inside.
It can also help to protect against accidents which occur at home, and it essential if any part of your business is conducted from within your home.
Renter’s insurance may not be directly relevant to your business, but it is essential for a business owner. The policy will protect you from damage to the physical property, personal injury in the home, and damage to the tangible property.
Product Liability Insurance
If your business is responsible for manufacturing products for sale to the general public, it is essential that you are covered by product liability insurance.
The last thing you want is to be faced with a lawsuit, so make sure you have coverage to protect you legally and financially. You can even tailor your coverage to cover your type of product.
Life insurance is another essential.
The policy is designed to protect you against death, and the insurer will agree to pay out a certain amount to a named beneficiary in the event of your death. It can also be used to protect your business and other assets after you pass.
Personal Umbrella Insurance
Umbrella insurance is the ultimate of all coverages and is used to add an extension to an existing policy, which offers benefits above and beyond the current content.
It can be used to cover and extend many different claims, including auto insurance or homeowners, and is generally sold in increments of $1 million. It can only be used when liability on all other policies has been exhausted.
Which Business Insurance Policies Do I Need?
All businesses need basic policies, such as commercial property, general liability, and commercial auto, as well as workers comp if you have employees.
When it comes to additional types of insurance policies, it is a good idea to sit down and consider every situation your business could be affected by now is the time to consider the worse case scenarios.
You can also utilize the services of a business consultant to help with this to make sure you are covered.
Remember that the needs of your business will change as you grow and develop, so make sure you schedule in regular checks to make sure you remain covered and prepared for any situation.