A business needs to have certain types of insurance in place. Some of these insurances are imperative and some are mandated by law. Some are however not a legal requirement but it is better to have them to protect against unforeseen expenses and jeopardy. Here are the different types of business insurance that you would have to consider.
- The most important business insurance is general liability insurance. This kind of insurance protects you and your business from all liabilities. Should your workers get injured while doing their job, should your office infrastructure cause any harm to your workers or to the people who are using it, should there be any property damage or any sort of damage to a third party or even at your own business premises, there can be lawsuits, personal injury claims and various types of financial and legal damages that you would have to take care of. General liability insurance protects you in all such instances. You will be able to pay the legal fees, offer compensation and even repair the damages caused if it is to your business premises or property. Even if you are running a business from your home or garage, you need to have general liability insurance.
- Property insurance is another very important requisite. You may have a large office or a small one. You would have certain assets such as computers, furniture, office equipment and the inventory of products or a wide range of tools. You can protect all these assets with property insurance and you can protect the property itself. Should there be a fire, theft, water damage, smoke damage or vandalism, you would be able to make up for the lost assets and you would be able to pay for the repairs of the damages using the coverage of property insurance. Some business owners also opt for business interruption insurance, also known as loss of earning insurance, along with property insurance. When your property is damaged or your inventory is stolen or your equipments are malfunctioning, you would not be able to run or operate your business which will lead you to losses or at least no income. Business interruption insurance will protect you in such cases and you can keep repaying your debts or loans if you have any. You would also be able to keep paying the recurring costs of running the business.
- Instead of signing up for standalone insurance policies, some people prefer to get a business owner’s policy. A typical business owner’s policy would include property insurance, business interruption insurance, liability insurance, vehicle coverage and crime insurance. You can actually customize a business owner’s policy based on what you need and what is more important to you. Insurance premiums aren’t very cheap so opting for a combined policy like this one will save you a lot of money.
- If your business uses company cars or commercial vehicles, then those should be insured. Commercial auto insurance is imperative if you have even one car or vehicle owned by the company. If you don’t have any such cars, then you don’t really need commercial auto insurance. Should some of your employees have cars and use them for your business or for some purposes linked to your business then you can have non-owned auto liability. This would protect your company should the employee not have updated insurance or have insufficient coverage. You can add this non-owned auto liability to your business owner’s policy.
- Worker’s compensation is another very significant policy that a business should have in place. Even if a job is absolutely safe and the nature of a business or the industry it is in doesn’t pose any physical threat to the workers, there should still be worker’s compensation to safeguard against that one untoward incident which can become a huge financial liability. Workers’ compensation takes care of the medical expenses of those who get injured on the job, their wages are taken care of and they can be provided with financial benefits, short term and long term.
- E&O insurance has become significant in recent years. Known as errors and omissions insurance or simply as professional liability insurance, this type of policy offers protection against damages, lawsuits and financial claims should a company fail to deliver a certain service or should its products end up being faulty. Such type of coverage is not included in general liability insurance so it must be opted for separately. This insurance is much like the bond that families of patients needing critical operations sign, thus allowing the doctor or the surgeon to be not exposed to damages and claims should the operation go wrong. All companies don’t need this insurance but accountants, lawyers, consultants, insurance agents, technology companies, hair salons and the likes should always have it.
Some other types of insurance that you may consider are directors and officers insurance, data breach insurance and all your personal insurances.
The cost of business insurance varies. What type of business it is, who the insurer is, the coverage needed and the various consequential clauses and exemptions; all of these factors and more would come into play to determine the premiums.