If you have assets, you want to protect them. You lock your home and your car at night because you don’t want someone taking what is yours. Your business is the same way. You need to protect it with locks and alarm systems just like your home. However, you also need to have the protection of insurance, just as you would your home and car.
The protection that business insurance provides you is the comfort that no matter what happens, you won’t have to pay out of pocket for certain costs. You hope you never have to use it, but in life, anything can happen. Even if you don’t do anything wrong, you can still be sued or accused of negligence. If you are not protected by insurance, you could end up having to declare bankruptcy and shut down your company. Do not take chances. Make sure that you have the most important types of business insurance policies.
General Liability Insurance
Perhaps the most important coverage is general liability insurance for business. Why is this important? It’s important because every interaction you have at your place of business presents a risk. You could do everything right, but if someone makes a mistake, such as not putting a sign up when mopping the floor, or leaving a loose computer cord on the crowd, an accident could happen.
If someone is injured or worse on your property, they could make a claim against you. This means that you will be responsible for your own court costs, defense costs, and any possible damages awarded to the complainant. If you do not have liability insurance, then you will have to pay those costs. The real damaging cost will come if you have to pay for medical and rehabilitation costs. These are the types of expenses that could absolutely sink your business.
General liability will also protect you against claims that are made that do not involve injury or death. If you are accused of reputational damage by another party, then you will also have court and defense costs. This can include libel and slander.
This coverage is about protecting you and your business if someone on your staff gets sick or injured and is unable to work. If they are not working, then they will not be making an income. If you have workers’ compensation they can continue getting financial compensation to help pay the bills and put food on the table. There is no reason that one of your team members should end up destitute as a result of an injury while working for you.
Worker’s compensation can also help pay for medical costs. That way the employee can focus on healing and getting back to work without stressing about how they are going to pay their next bill. This coverage is mandatory in most states, so it is especially important to have it if you are in one of those states.
Professional Liability Insurance
This one is very important if your business involves providing a service to others. You could have another party bring a claim against you if you think that some part of your service was insufficient and caused them to suffer some kind of loss. For example, if you are hired to renovate a building as a contractor, and given a deadline because they have an opening plan for a new restaurant. If you are not finished on time and it pushes that timeline back, they could claim that they lost out on revenue by not being open when they planned to be.
Accountants and financial advisors are also at risk of claims against them. If a client suffers losses because of projections and predictions that are incorrect, they might file against you. Or, if you or an employee makes a calculation error, you could give a client information based on those bad calculations. For doctors, professional liability insurance is called medical malpractice insurance. It protects you against having to re-pay for any losses you have been deemed to have caused. If your business is not service-based, then you may not need this coverage.
Commercial Property Insurance
While your general liability insurance will cover you if someone is injured or killed on your property, or if someone sues you, commercial property will protect you if your building is damaged or destroyed. Floods, vandalism, fire, and any number of hazards can cause damage to your physical premises and their contents. Your general liability coverage will not protect against those risks.
This coverage is especially important for those who have a physical workplace, but even if you are working from home you may need some sort of property coverage. If you have inventory at home and business supplies, like computers, they may not be covered by your personal property. Commercial property insurance will also cover exterior fixtures, like signage and fences.
Commercial Automobile Insurance
Just like you would not drive your car without insurance, you should not drive a vehicle owned by your business without it. It is not covered under your general liability or property insurance. If you use your personal vehicle, you might not be protected if you get in an accident while carrying out personal tasks. The last thing you want is for you or one of your employees to be involved in an incident and then find out that you are not covered. In most states, there are minimums for the coverage you get. The more risky your business is with regards to vehicles, the higher your coverage needs to be. A large semi-truck can cause more damage than a pickup truck, for example.
Make sure that your business is not just protected, but protected with the right coverage. There are many risks involved with owning and running a business, and they are not all covered by your general liability insurance. Beyond this list, there are several other types of insurance that might be appropriate for your specific business. When shopping for your insurance, make sure that you take every risk into account so you can rest your head at night knowing that you are protected.