The Types of Business Insurance You Need to Have
Every business has risks, and the scary part is that the risks begin the same day that the business does. You’re at risk before you even hire your first employee and the last thing you want as a new business owner is to deal with lawsuits or other events that could put you out of business before business actually even starts. Luckily, with the right tools in place, you can protect yourself. We recently read a great Entrepreneur article on the types of insurance businesses need to have and we’ve highlight the most important points below.
Here are 7 types of business insurance to protect your business:
- Professional Liability Insurance: Also known as errors & omissions insurance, or E&O, professional liability insurance covers your business again claims of negligence due to harm resulting from mistakes or a failure to perform. Your professional liability insurance policy will vary depending on the type of business you’re in as each industry has concerns specific to that industry.
- Property Insurance: Regardless of if you lease or own your business space, you need to have property insurance to cover signage, equipment, inventory and furniture in the case of theft or a fire or storm. Events like earthquakes and floods typically aren’t covered under standard policies so make sure to check with your insurance provider to learn how to protect yourself.
- Workers’ Compensation Insurance: You need to add workers’ comp insurance to your policy as soon as you hire your first employee. Workers’ comp will cover medical treatment, disability, and death benefits if an employee is injured or killed due to their work. Remember, workers’ comp isn’t just for businesses dealing with injury prone jobs. Anything can happen and even small accidents can lead to costly claims.
- Home-Based Businesses: If your business is based out of your house, you need to know that your homeowners insurance policy will not cover your business in the same way that commercial property insurance will. Speak with your provider and find out how to protect your business assets.
- Product Liability Insurance: You need to have product liability insurance if you manufacture products to be sold on the general market. You should always be sure to take every possible action to make sure your products are safe, but even then you can find yourself dealing with a lawsuit because of damage caused by your product. With product liability insurance, you can get coverage tailored specifically to your needs and the product you sell.
- Vehicle Insurance: If your business uses vehicles, you need to make sure they are fully insured in the event of an accident. If employees are using their own car, their insurance will cover them unless they are delivering services or goods for a fee. Make sure you speak to your provider and that they know exactly what the cars will be used for that they can guide you in the right direction and make sure that you are properly covered.
- Business Interruption Insurance: Disasters and catastrophic events happen, and they often lead to an interruption in regular business operations. During this interruption, you will lose income because your staff isn’t working and you can’t deliver. There is nothing you can do to avoid disasters and catostrophic events except make sure you’re protected. Business interruption insurance will compensate a business for the income lost during these types of events.
Starting a business is a wonderful endeavor for any entrepreneur, but it doesn’t come without risks. You need to make sure you’re protected so that all the hard work you put in to creating a successful business actually has the opportunity to pay off. Click here to learn more about business insurance and find out what types of business insurance you need to protect your business.