In the same way individuals need health insurance, life insurance, car insurance, and home insurance, entrepreneurs need multiple types of insurance for their business. These insurance protect businesses from financial losses that are likely to occur. As a business owner, you are liable for any damages your business does to another individual. If you’re a business owner— whether recently or if you have been for a while now— here are eight types of business insurance that you may need.
#1: Business Interruption Insurance
The first type of insurance that business owners will need is business interruption insurance. This covers employee wages, rent, debt repayment, and sometimes even a temporary location when your business cannot operate due to an unforeseen event (such as property damage) or even a planned event (such as renovations and remodels).
During the pandemic, many business owners wondered if their business interruption insurance covered COVID-19 (since many businesses had to close), but found that it was only covered if their insurance plan explicitly stated that it covered pandemics. Because of this, many business owners will ensure that their insurance plan covers pandemics.
#2: Commercial Auto Insurance
Your personal car insurance policy will not cover any auto accidents that are business related, especially if you use a company car. For this reason, you’ll need commercial auto insurance. So if you make deliveries, house calls, or use your vehicle for any business purpose, you’ll need this type of insurance.
#3: Commercial Property Insurance
Businesses can become damaged from natural disasters (severe storms, earthquakes, etc.) and fires, so business owners need coverage for these possible tragedies. Commercial property insurance will cover the cost of damage to the property, as well as any damage to business inventory.
#4: Data Breach/Cyber Liability Insurance
If you collect and store customer/client information for business purposes, you’re at risk of a data breach, and will be held liable for the damages this causes. This is why you’ll need data breach/cyber liability insurance. This covers the cost of notifying your customers and can even provide them with credit monitoring.
#5: General Liability Insurance
General liability insurance (GLI) is one of the most common types of insurance that all businesses need. GLI covers advertising injury, bodily injury, and property damage claims made against your business.
This type of insurance typically covers premises liabilities, but you’ll want to make sure that your GLI covers this specifically because accidents are fairly common on commercial properties. Visitors to your business can slip, trip, or fall on your property, and you’ll be held legally responsible. Those who have been injured on another’s property should visit https://www.rosenfeldinjurylawyers.com/premises-liability.html, and business owners should inspect their property thoroughly and regularly for potential and apparent hazards.
#6: Product/Professional Liability Insurance
If you’re the type of business that sells products to customers, then you’ll need product liability insurance in the event that your product injures your customers or damages their property. On the other hand, businesses that provide services to clients/patients will need professional liability insurance/medical malpractice insurance. Professional liability insurance is also known as errors and omissions insurance, and it covers claims of bodily injury and negligence.
#7: Umbrella Insurance
Commercial umbrella insurance covers the things that your other insurance policies may not cover. Using the pandemic example again, if business interruption insurance policies refuse to cover pandemics and contagious illnesses, then an umbrella policy may cover it instead. Another example would be extensions when limits of other policies have been reached.
#8: Workers’ Compensation Insurance
Employees can become injured while on the job, and you as the business owner will be held legally responsible. This is why all businesses are required to have workers’ compensation insurance, in the event that an employee gets injured or killed while performing work-related tasks. This is also why employers should make sure that all employees are properly trained and all equipment is working properly to prevent this in the first place. Still, accidents can happen and your employees have the right to compensation.
Starting up, owning, and operating a business comes with a lot of costs, and you don’t want to add any unnecessary costs to this. Of course insurance policies will charge a fee each month/year/etc., but legal fees will cost you much more than a steady payment on a policy. It’s also important that you lower the risks of any of these liabilities occurring, such as driving safely, investing in good cyber security, keeping your property free of hazards, and offering your customers the best.