Understanding the Basics of Business Insurance
All businesses need insurance. Not only does it protect your business in the event that something catastrophic happens but it also protects your business from loss in the event of an injury-related lawsuit.
It doesn’t matter what kind of business or industry you’re in…stuff happens. When some sort of accident occurs, your business needs to be insured. These are a few of the types of insurance your business needs before you even considering opening your doors to the general public.
Required Policies
Most businesses that have employees are required to have workers’ compensation insurance coverage for those employees and pay unemployment insurance tax on their employees. Some states require additional coverage in the form of disability insurance — though this practice is not yet universal.
Liability Policies
The reality of business today is that it is risky. Even mopping your floors can prove to be quite risky — and costly without adequate liability insurance coverage. Businesses today need three different types of liability coverage in order to cover their bases.
- General Liability Insurance – covers legal issues related to accidents, injuries, and negligence claims. These policies protect your business from the brunt of financial damages due to the bodily injury, slander, libel, medical expenses, property damage, and the high costs of defending against lawsuits.
- Product Liability Insurance – protects businesses from financial losses related to defective products. The amount of coverage a business needs depends on the amount and type of product risks the business faces. For instance, businesses that deal in children’s furniture or car seats may face a much greater potential risk than those that specialize in textiles.
- Professional Liability Insurance – in certain fields this type of coverage is a must to avoid things such as malpractice suits, lawsuits over accounting errors, or negligence when providing services of any kind to your customers.
Physical Property Insurance
The physical property where your business is located is important. Not only is it home to the equipment, supplies, and in some cases merchandise you offer for sale, but it also has value in its own right.
Depending on specific perils in your area of the country, it’s a wise plan to have an all-risk policy that covers a wide range of contingencies as well as peril specific policies that cover specific incidents that damage your business.
Home Based Business Insurance
More and more businesses are operating from homes. Unfortunately, many of these business owners are relying on their home insurance policies to keep their businesses operating in the event that something should happen.
Even if you purchase the appropriate rider policies on your home insurance policy, they can only do so much. You need to invest in appropriate insurance that will cover the needs of your home based business, protect your inventory in the event that damage occurs, and cover the liability risks operating a business from your home creates.
These are just a few of the common business policies your business is likely to need. It’s important to talk with a qualified insurance agent in your area to find out about specific types of policies necessary to comply with state and local requirements.
Call us today to discuss your particular business insurance needs!