7 Types of Insurance You Need to Protect Your Business
Starting a business exposes an entrepreneur to various dangers from the start. A business is in danger even before the first person is employed, so it’s critical to have the correct business insurance in place. A single lawsuit or catastrophic occurrence could be enough to put a small business out of business before it ever gets started.
Fortunately, businesses can choose from a variety of insurance options to protect themselves from these threats. Here are a few forms of insurance that a company should have in place as soon as feasible.
1. Professional liability insurance.
Professional liability insurance, often known as errors and omissions (E&O) insurance, protects a company from claims of carelessness arising from mistakes or failure to perform. Professional liability insurance is not a one-size-fits-all policy. Each sector has its unique set of challenges, which will be addressed in a policy designed specifically for a company.
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2. Workers’ compensation insurance.
Workers’ compensation insurance should be added to a company’s insurance policy whenever the first employee is employed. If an employee is hurt or dies as a result of his work with that company, this will cover medical treatment, disability, and death payments. Even if employees appear to be performing low-risk tasks, slip-and-fall accidents or medical issues like carpal tunnel syndrome might result in a costly lawsuit.
3. Property insurance.
Property insurance is required whether a company owns or leases its space. In the event of a fire, storm, or theft, this insurance protects your equipment, signage, inventory, and furniture. Floods and earthquakes, on the other hand, are often not covered by standard property insurance policies. If you live in a region where these problems are common, talk to your insurer about getting separate insurance.
4. Home-based businesses.
Many professionals start their own small enterprises from the comfort of their own homes. Unfortunately, unlike commercial property insurance, homeowner’s policies do not cover home-based enterprises. If you run your business out of your house, be sure you have enough insurance to cover your equipment and goods if something goes wrong.
5. Product liability insurance.
If your company makes products for the general public, product liability insurance is required. Even a company that takes every precaution to ensure that its products are safe can be named in a lawsuit as a result of damages caused by one of its products. Product liability insurance protects a company in this situation, with coverage that can be tailored to a specific type of product.
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6. Vehicle insurance.
If company vehicles are to be utilized, they should be adequately insured to protect firms from liability in the event of an accident. Businesses should protect against third-party injuries at the very least, but comprehensive insurance will also cover that vehicle in the event of an accident. Employees who drive their own automobiles for work will be covered by their own personal insurance in the case of an accident. If they are supplying goods or services for a fee, this is an exemption. This applies to delivery employees as well.
7. Business interruption insurance.
A business’s activities will almost certainly be disrupted if a disaster or catastrophic event occurs. Your company will lose money during this time since your employees are unable to work in the office, manufacture items, or make sales calls. This sort of insurance is particularly useful for businesses that need a physical place to operate, such as retail outlets. Business interruption insurance reimburses a company for income lost due to these occurrences.
A firm can avoid a large financial loss due to a lawsuit or a catastrophic incident by having the correct insurance in place. Consult your insurer to learn what types of insurance are recommended for your industry, and put those plans in place as soon as feasible.