August 19, 2021 | 4-minute read (688 words)
Entrepreneurs take a risk the moment they establish their business. But a single lawsuit can be enough to put a small firm out of business before it even gets off the ground. A typical customer injury insurance claim costs up to $35,000. So among myriad other concerns, owners must also ensure they have sufficient insurance coverage.
An array of business insurance options are available to protect you against a variety of hazards. Check out this list of insurance plans that your company should have in place, even if you don't think you'll need them all right now.
Insurance for general liability
Typically, this is the first insurance a new business will purchase because it protects the owner’s assets in the event of a lawsuit. For example, if someone were to fall or slip at your property, general liability insurance would help cover your costs. Even if you can't immediately find a one-size-fits-all policy for your needs, you'll want to obtain this insurance as soon as possible after creating your firm to cover any potential losses.
Nearly every state requires businesses to have workers' compensation coverage to protect employers and their employees from financial loss in the event an employee is hurt on the job or gets sick from a work-related cause. In most U.S. jurisdictions, workers' compensation coverage is mandatory if you employ a certain number of W-2 employees. In California, for example, even if you just have one employee, you must have workers' compensation. Consult your own state's regulations and acquire coverage accordingly.
Indemnity for unemployment
Unemployment insurance, like workers' compensation, is typically mandated by your state if you have employees. It provides temporary financial assistance to workers if they are laid off. Setting up this coverage is best done at the beginning of the payroll process when employees are newly added to the payroll process.
Policies of the business owner
In some instances, insurance providers will offer the option of purchasing a collection of company insurance policies all at once, which is also known as a business owner's policy. It is possible to create your own BOP package, which generally includes general liability, commercial property and business income insurance.
Business property insurance can help protect your business in the event of accidents or tragedies such as fire, theft or wind damage. It protects your buildings and its contents.
Coverage for business interruption
As a result of difficulties such as a fire in a building, your property insurance may cover your computers and inventory. However, you may also require business interruption insurance to pay for losses you incur while waiting for replacement equipment and inventory. It compensates your firm for lost revenue and related expenses if a property insurance claim necessitates you close the business temporarily.
Insurance for commercial vehicles
If your company has a corporate automobile, then purchasing commercial auto insurance coverage should be a priority. If your work vehicle is destroyed or someone is injured while on the job in the vehicle, this type of insurance provides liability and physical damage protection.
Liability insurance for cybercrime
Depending on the type of business, most companies keep confidential client information on file, which may include credit card numbers, social security numbers and even health records. Cyber liability coverage safeguards your business against financial losses that result from data breaches and other cyber events.
Liability insurance for products
Your general liability coverage may not cover any damages caused by a malfunctioning product that you sell. If you manufacture, distribute or sell items, you should consider purchasing product liability insurance.
Insuring a home-based business
To protect yourself, you should consider adding a business rider to your homeowner's insurance policy. In certain circumstances, it may help you recoup the cost of lost company equipment if anyone gets injured while visiting your home for a job.
Consider consulting a specialist who can assess your liability risk and assist you in deciding on coverage types and levels when it comes to these sorts of insurance plans. You may also need to consult attorneys, insurance agents, accountants and other professionals to help you manage the process.