There are many insurance coverages for different types of risk that your business might face during operations. Business insurance is a safety net but knowing the right kind of insurance policy you need is more important. There are good reasons your business needs insurance.
Before you buy any insurance policy, you have to know exactly what risk you want it to cover and the premium to be paid. This is because, cost of insurance varies among insurers.
Depending on the kind of business you operate or your industry, you may need one policy more than the other.
Usually, business owners start with the Business Owner’s Policy (BOP) which combines coverages for general liability insurance, commercial property insurance and business income insurance.
Every business is different, so you may ask; what are the available insurance policies for my business?
Listed below are 10 types of business insurance that you may want to consider, of course according to your business needs.
1. General Liability Insurance
General liability insurance protects your business from claims or lawsuits from people outside your business. It covers third party property damage, injuries, libel or slander.
This insurance will compensate third parties or restore them to their original position before the occurrence.
2. Professional Liability Insurance
Professional Liability Insurance is a specific type of insurance that protects your business from lawsuits or claims resulting from negligence, error or an omission.
If your business provides a professional service or often signs contracts with clients or partners, you may want to get a professional liability insurance policy.
This type of insurance also gives your business an edge at the negotiation table (i.e. clients or business partners will feel protected by insurance should something go wrong).
3. Workers Compensation Insurance
Workers’ compensation insurance provides cover for employees against work related accidents or injuries.
It gives them the benefit of payment of medical bills, funeral costs, replace lost wages or payment of cost of rehabilitation.
This policy is mandatory in some states, and a business can face penalties, fines, civil or criminal charges for non-compliance.
4. Cyber Insurance
Cyber liability insurance protects you and your business from loss of personal information of employees or customers resulting from data breach or company system compromise .
The policy payouts the operational expenses as well as expenses incurred by customers who have been necessarily impacted.
It also covers the cost of recovering your data, creating a public relations campaign, restoring and improving your business digital security.
5. Commercial Auto Insurance
Commercial Auto Insurance can also be called commercial car insurance. This policy protects you and your employees from claims resulting from property damage or injury caused during the use of the company-owned vehicle. You can buy cheap auto insurance from AllState Insurance
You can also purchase commercial fleet coverage as a separate policy. Some states mandate a minimum requirement for coverage.
It is important to note that, even if you are using your personal vehicle for business purposes, it won’t be covered by your personal auto insurance in the event of accident, third party jury or property damage claims.
6. Income Insurance
In the event of covered property damage or the occurrence of a covered incident that halts operation, business income insurance can help you replace lost income.
So lets say, fire guts some part of your business building which causes you to halt operation for a month or two, the income insurance will compensate you for the possible income you lost without operating. Got it?
The policy will reimburse you for the income lost, which you can use to pay for operational expenses like rent, utility bills, payroll or taxes. This type of insurance is also called as business interruption insurance.
7. Commercial Property Insurance
Commercial property insurance provides coverage for any damage or loss to physical business property such as an equipment, office building or a business vehicle.
According The Hartford, this insurance doesn’t cover damage from earthquakes or floods. So you’ll have to get a separate peril-specific policy, like commercial flood insurance, to help protect your business from these kind of claims.
8. Commercial Umbrella Insurance
Commercial umbrella insurance covers beyond the limit of your liability policies. Where a claim against your business exceeds the amount that can be paid by your insurance policy, the umbrella insurance will cover for that difference.
Umbrella insurance can only be used when your regular liability coverage is maxed out for a specific incident.
9. Product liability insurance
If your business is into manufacturing, import and export, distribution, and so on, your products could be liable for its safety. Products can be damaged or lost in transit.
In that case, product liability insurance can protect you against financial loss as a result of a defect product that causes injury or bodily harm.
The amount of insurance to purchase should depend on the products you manufacture or distribute.
Insurance doesn’t have to be scary or expensive. The costs or lost that your business may suffer from accidents, machine break down, lawsuits etc, may be ten folds the cost of insurance.
So protect your entire business with insurance to give you some peace of mind to concentrate on what really matters.