When an entrepreneur starts a business for the very first time, he’s already faced with particular risks. And prior to hiring the first employee, a business is at risk, the reason why it’s crucial to buy the right insurance depending on your needs. Even one catastrophic event or lawsuit can instantly destroy a small business before it even gets the chance of rising from the ground.
The good thing is, businesses are given an extensive range of insurance types to secure them against these hazards. To help you know what kind of insurance is right for your business, here are some type of business insurance that you may want to consider:
1. Property insurance
This type of business insurance is a must, whether you rent or own space for running your business. Property insurance covers inventory, equipment, signage, and furniture in case a storm, fire, or robbery happens. But take note that mass-destruction events like earthquakes or floods are not included in the coverage under standard policies of property insurance. So if your location is prone to these risks, make sure you talk with your insurer to provide you with a separate policy.
2. Public liability insurance
This covers your injured clients or their harmed property. It’s very important to have this insurance because they cover any claims and legal fees if one of your clients for instance had an accident or you unintentionally damage something they own while you’re working.
3. Workers’ compensation insurance
After hiring your first employee, it’s best that you add workers’ compensation insurance to your business’s insurance policy. The coverage includes medical treatment, death, and disability benefits in the event when an employee gets injured or dies as a result of his job with your business. However, don’t think about this not being necessary because even if employees seem to be doing low-risk work, medical conditions and slip-and-fall injuries can result in a costly claim.
4. Product liability insurance
Consider this as insurance for the products you supply which can assist to compensate anyone who was hurt or injured because of the product you’ve designed, supplied, repaired. You don’t need to be the manufacturer to be responsible for damages. Even if your business follows and implements every measure available to ensure its products are safe can find your name in a lawsuit due to damages brought by one of its products.
5. Professional indemnity insurance
This insurance covers your client’s vanished sales or harmed reputation. It gives your business knowledge, advice, skills as part of the coverage. This is why professional indemnity insurance is helpful if your work results in a client’s loss of sales or devastating reputation. It can help answer the cost of legal claims and fees.
6. Business interruption insurance
No one can tell when a disaster or catastrophic event happens, but when it happens, a business’s operations can be interrupted. In this situation, your business can experience lost income due to your employees working in the office, performing sales calls, manufacturing products.
Business interruption insurance is specifically suitable for companies that necessitate a physical location to operate a business like retail stores. Business interruption insurance pays a business for its lost earnings throughout these events.
7. Key-man insurance
Every company has its own valuable employees who are skilled to keep the business going. If you have these people, you can insure them. And if they can’t work, you’ll be compensated for that loss.
8. Professional liability insurance
Also called E&O insurance or Errors and Omissions insurance, this insurance covers the negligence of a business because of harm that resulted from mistakes or frustration to perform. Take note a one-size-fits-all policy is not available for professional liability insurance. Every industry has its own group of concerns that will be communicated in a customized policy put in writing for a business.
9. Employers’ liability insurance
All types of business with employees, they’re required legally to own this insurance. So whether you have one or ten employees, part-time or full-time. Employers’ liability insurance can help cover the expenses of claims made against you if a worker is injured or gets sick while working for your company.
10. Home-based business
Although this is not technically part of the business insurance types, we’ve included it here because many people today are starting their small businesses in the comfort of their own homes. You need to be informed that homeowner’s policies don’t cover home-based businesses like how commercial property insurance does. If you’re running your own business out of your house, inquire for additional insurance from your insurer to cover the equipment you use and inventory you have in the event of a problem.
On the Note
Having your business insured is not about looking for the cheapest option out there; it’s about having the right package and coverage at the right price. The right insurance for your business will surely help you avoid major financial loss, so check with your insurer what type of insurance is advised for your business and place it as soon as possible.