As a small business owner, you try to avoid spending money on nonessential costs to operate your company, but insurance is not something that you can skip. It’s a vital part of your business that keeps it alive during inevitable mishaps or unforeseen circumstances. In some states, insurance is a mandatory requirement for certain types of businesses. This guide will provide the essential information that you need to understand the need for insurance and how to make the right choices for your business.
Types of Business Insurance
A popular and wise choice for many businesses is a Business Owner’s Policy (BOP). This is an insurance package that combines the essentials into one policy. It usually includes Commercial Property Insurance and General Liability Insurance. Business owners often have this package because it’s less expensive than having separate policies and it simplifies the process of insuring your business.
General liability coverage that is included with this will cover injury to customers or damage to their property. It can also cover legal costs if a customer files a lawsuit against your company. A Business Owner’s Policy also covers commercial property damages from various kinds of unforeseen circumstances.
In some cases, you might need more than what a Business Owner’s Policy provides. If you provide a professional service such as accounting, medical, or legal advice, general liability will not cover mistakes or damages that result from these services. If a professional makes a mistake that costs a customer financial or other harm, the policy will cover the legal costs of resulting lawsuits.
If you’re in a location that is riskier due to flooding or severe weather, you might want to protect your business further than property damage with a business income coverage policy. This will help your company recover lost income when your business has to shut down for repairs.
If your business has employees, your state will probably require your company to have worker’s compensation insurance. This will provide assistance to employees who develop job-related injuries that pay their medical bills and provide financial help during days of lost wages. It can also provide some coverage to pay legal fees when a worker sues a company for improperly safeguarding them from harm on the job.
Finding the Right Insurance
In most cases, a business will need to have a minimum of general liability, commercial property, and worker’s compensation coverage. It’s wise to insure your business unless a professional advises you otherwise. In any case, insurance will protect your company and keep it operating when inevitable mishaps occur. If you have a detailed business plan and know the needs of your company, you will be better equipped to understand which types of coverage are essential for your business.
A professional broker is the best resource to help you choose the right insurance that covers the needs of your business and keeps it compliant with legal requirements. Insuring your business is one of the vital aspects to plan for and set up right when running a business. If you haven’t done so, start now to make sure your business is properly covered with the right business insurance policies.