Businesses need to have insurance if they want to lower their risks of a lawsuit. A lot can go wrong when operating a business, and people can sue you if they’re injured or if mistakes lead to a negligence claim against you.
Insurance aims to protect you from liabilities, but you’ll need a variety of insurance policies to protect all aspects of your business.
The types of insurance that entrepreneurs need to have are:
1. Professional Liability Insurance
A general umbrella policy, professional liability will protect your business from mistakes made or failure to perform which leads to harm. What’s great about this insurance product is that it’s fully customized to your business.
You’ll have a plan that’s tailored to your business’s needs, so you can make sure that all of your needs and concerns are met.
There are some businesses that might not need liability insurance, but most should have some basic form of liability insurance.
2. Workers’ Compensation
“Nearly all employers are required to carry workers’ compensation coverage,” according to LVaccident.com. You’ll want to add workers’ compensation insurance almost immediately when you hire your first employee.
Every state has their own requirements.
When you have workers’ compensation insurance, it will limit your liability and will cover costs of:
- Medical treatment
- Death benefits
Workers’ comp will cover all injuries that are work-related, even carpal tunnel syndrome or a slip and fall.
3. Product Liability Insurance
Product liability insurance is a must-have, and it’s this type of insurance that is required if you’re a manufacturer that sells products. All of the quality assurance in the world is not enough to limit yourself from a lawsuit.
The good news is that this insurance policy is also tailored to your business, so you’ll have a policy that will specifically cover all aspects of your business.
4. Property Insurance
Businesses have property that they own, but a lot of owners assume that property insurance only covers real estate. This is wrong. While property insurance will cover a building, it will also cover:
So, all of your business’s contents will be covered under this policy. What’s very important to note is that this policy will not cover natural disasters. When dealing with a business that may be in an area prone to natural disasters, it’s best to discuss your options with your insurer. The insurer will be able to write a separate policy relating to floods, tornadoes, earthquakes or other natural disasters.
5. Home-based Business Insurance
A major overlook for many small business owners, home-based business insurance will ensure that all of your equipment and inventory is safe if it’s damaged in the home. For example, a lot of businesses will operate out of their garage initially.
If a fire breaks out and destroys the business inventory and equipment, it’s not covered under a homeowner’s insurance policy.
You will need to have a separate policy, or additional insurance to help cover your home-based business’s property.
And while this is just the start of the insurance policies that your business will need, there are also many others, including commercial auto insurance.