7 Types of Insurance Entrepreneurs Should Get
Let’s learn more about seven types of insurance entrepreneurs need to consider to protect their business operations and finances from various unfortunate circumstances.
Business insurance offers a business ample protection, especially in unforeseen events that may heavily affect business operations and finances. With the right insurance in place, you can tackle certain risks that can pose a serious threat to your business with ease.
But what’s the right insurance to protect your small business?
Professional Liability Insurance
Sometimes called error and omissions (E&O) insurance, professional liability insurance is essential for all businesses that offer customers advice and services. This insurance covers businesses from claims of negligence because of harm that results from failure to perform or provide services.
The professional liability insurance will cover the cost of damages that can be linked to losses that are the result of your errors or negligence.
Attorneys, accountants, consultants and other professional services who make their money by offering advice to clients absolutely must carry error and omissions insurance to protect themselves from unfortunate circumstances.
Whether you operate your business on a lease or own space, property insurance is crucial. Property insurance covers the cost of rebuilding and repairing your company’s physical structure in case you sustain damage from storm, wind, vandalism, theft, or fire.
Nonetheless, this insurance doesn’t cover mass destruction events like earthquakes or floods. If you’ve established your business in a location, that’s prone to these issues, then consult your insurance company to price a different policy. In this situation you will likely require property insurance plus flood coverage, hurricane coverage or coverage for whatever type of event your part of the country is prone to.
Worker’s Compensation Insurance
If you’re running your business alone or with the help of a partner, you can manage without worker’s compensation insurance. But if you have hired some employees, you need to get this insurance.
This insurance covers the cost of medical treatments, disability benefits, and more in the event a worker gets injured at work. Keep in mind that accidents can occur in places that seem safe. For instance, employees can develop carpel tunnel syndrome from typing, and this could cause a pricey claim. Just because your business operates in a low risk environment like an office does not mean you should avoid having worker’s compensation insurance.
Home Based Business Insurance
The home-based business insurance is for experts who run their business from the comfort of their home. It comes in handy since homeowner’s policies rarely cover home-based business the way commercial property insurance does.
If you’re planning to establish your new business out of your home, ask your insurance company to provide you with extra insurance to protect your inventory in case an event occurs and damages it.
Product Liability Insurance
A business that manufactures products for the consumption of the general public requires product liability insurance. Even though businesses can take all the necessary measures to ensure they deliver high-quality products, there are certain unfortunate cases where faulty products can reach the customer.
As a result, it might cause harm to the health of the customers resulting in lawsuits against the business. If you have product liability insurance, it will protect your business from this unfortunate event.
Vehicle insurance is a must for any business with company vehicles used for business transactions such as transport, logistics, and delivery. This insurance will cover the business against any liability in case the vehicle gets into a road accident. However, a comprehensive business policy can cover even company vehicles.
Business Interruption Insurance
When a catastrophic event or disaster occurs, there’s a high possibility that most business activities can get affected. Workers won’t able to attend work, the manufacturing process will stop and business income will reduce. But you can protect your business from this by getting a Business Interruption Insurance, which can compensate a business for its lost income when such events occur.
Certainly, insurances are essential tools to protect businesses against major financial loss because of fire equipment damage, lawsuit, catastrophic event, and even burglary. It wise to seek the advice of your insurer to receive a suggestion of the best insurance to fit your business protection needs.
No business owner likes to think about or pay for insurance policies, however, they are very important to hold. Having proper insurance coverage can prevent a business from going bankrupt if an unfortunate circumstance arises. You would also be surprised how affordable many of these insurance policies are. The small cost to protect your business is almost always worth it.