Types of Business Insurance Every Company Should Have
Trying to figure out if your business “really needs” insurance? It does. Take a look at this guide to find out the best types of business insurance every company should have.
You just established your first business. It’s your baby. You probably spent months or even years getting ready for this moment.
You’re excited because your lifelong dream is a reality.
Did you know that this can disappear in just a blink of an eye? You must be thinking, what are they talking about?
We aren’t kidding. Your business can disappear with just a lawsuit or catastrophic event.
We don’t plan or expect those events. The only way to be ready is by insuring your business.
Yet, not all insurances are the same or fit all businesses. Do you know what types of business insurance you should get for your business?
Don’t know where to start? We have you covered.
Ready to learn more?
Business Insurance: Where to Start?
Before we go into the different types of insurance, we’ll go over the basics of business insurance. What is business insurance? Why should you get it for your business?
Business insurance is used to protect businesses in case of losses from events that occur during the usual course of business. This coverage can protect from inventory losses to employee accidents. The types of losses covered depend on the business insurance type you get.
The type of business you’re conducting should give you an idea of what insurance you need. Not all insurances cover the same losses or events, so there’s no one size fits all formula. You should be proactive and get insurance to be ready for when the inevitable happens.
Like they say it’s better to be safe than sorry. Even if you’re operating a home-based business, you might need to get business insurance because your personal policies won’t cover your business operations.
Types of Business Insurance
To determine what type of business insurance, you should do an internal potential risks analysis depending on your business operations. For example, a wholesale business might not need the same type of business insurance a manufacturer needs.
Here are the different types of insurance every company should have:
1. General Liability Insurance
You’ve probably heard about this type of insurance before since it’s very common. This insurance coverage protects you and your employees from any harm caused or alleged damages to third parties from negligence in your products or services. These damages can be bodily injuries or to their property.
2. Property Insurance
Like its name says, this type of insurance protects your businesses’ property from theft, fire, and vandalism, among other types of damages.
The property can be inventory, equipment, building, tools, and other assets. The terms and coverage will depend on the insurance policy you get and the state where your operations are located.
3. Workers’ Compensation Insurance
If you’ve employees, this type of insurance is a must. Workers’ compensation insurance provides protection to employees when they’re injured while working for you. An example would be in a wholesale operation, Joe is arranging some boxes for shipment, and some inventory falls on him from the racks.
He’s injured and has to be taken to the hospital. Your policy can cover all those costs. When getting this type of policy, ask your agent about what the policy covers just to make sure it fits the risks in your business operations.
4. Professional Liability Insurance
You might think this coverage is the same as getting general liability insurance, but they aren’t the same. This insurance is used by service providers such as accountants, lawyers, consultants, real estate agents, among others.
This type of insurance protects them from mistakes made by these professionals. An example is when an accountant maintains a client’s accounting books but, makes a mistake that causes the client to be fined. When you get this type of insurance, it’s important to discuss with your agent the scope of the coverage.
5. Commercial Auto Insurance
This insurance covers the vehicles used for conducting business. This coverage includes accidents and damages caused by the employee while driving the vehicle.
An example is when you own a delivery company; one of your employees might drive off the road damaging a property. This insurance will cover those damages.
6. Cyber Liability Insurance
You might not have heard about this type of coverage, but protecting customer information is very important. Sometimes you might’ve all the needed controls in place and, cyber attacks still happen to your servers. This insurance coverage protects you from any lawsuits or damages from cybersecurity breaches.
7. Commercial Umbrella Insurance
This insurance coverage is kind of general liability insurance but going above and beyond. This business insurance offers additional asset and liability coverage limits. Commercial umbrella insurance coverage can add up to additional $10 million coverage.
8. Business Interruption Insurance
This type of insurance offers a safety net for when everything goes wrong. An example is if your building or facilities were burned in a fire and all your property were damaged.
You won’t be able to conduct any business till everything is fixed. This insurance may cover your monthly costs like employee payroll, utilities, among other operational costs.
10. Specialized Insurance Coverage
This insurance coverage has a long list because it depends on your industry. You might’ve heard about it if you’re in the trucking business or if you own a restaurant.
Some examples of this type of insurance coverage are liquor liability insurance, cargo insurance, and occupational accident, among others. Cargo insurance is used in the trucking business and, it protects the merchandise you or your driver is transporting. You should talk to your agent to have a better idea if your business operations require specialized insurance coverage.
11. Business Owner’s Policy
This type of policy can be called your own concierge insurance coverage. This policy will include all the required coverage for your business operations. This option is customized to your business needs.
If you own a wholesale business, you may need general liability, property, business interruption, and commercial auto insurance coverage but not liquor liability coverage. A business owner’s policy would pack all those types of insurance coverage into 1 package.
Wrapping It Up
Figuring out the types of business insurance you need for your business shouldn’t be complicated. Remember to focus on the basics of your operations and, do a risk analysis before meeting with your insurance agent.
This way you’ll have a better idea of what you need, and you can ask them all the questions you’ve about your insurance coverage needs. If you do this you’ll protect and, have the right insurance for your business in no time.
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