Insurance is probably one of the least sexy things you have to deal with as an entrepreneur. However, accidents happen, things break, and liability lawsuits are becoming all too common. Safeguarding your assets, your employees, and your livelihood should be a priority.
Several factors determine what type of business insurance coverage you’ll need, such as the nature of your business, whether you operate from a commercial building or home office, and if you have employees. Some insurance is required by law or by business associates, such as lenders and landlords.
Here are the general types of insurance coverage that business owners may need to protect themselves:
General Liability Insurance. This is often the first insurance policy a business owner purchases. It helps cover the costs of third-party claims made for bodily injury or property damage. There are also specific liability options available, including Cyber Liability and Employment Practices Liability.
Professional Liability Insurance. Liability insurance helps protect you and your business against a claim that professional advice, mistakes, or services you provided (or failed to provide) caused a client or customer harm.
Commercial Property Insurance. Protect yourself against loss from fire, windstorms, and other disasters. Coverage should include your store, office, factory, warehouse, or other facilities, as well as everything from computers and tools to inventory.
Business Interruption Insurance. Prepare for emergencies. Business interruption insurance can compensate you for lost revenue and cover ongoing operating expenses if you have to close your doors temporarily due to damage that is covered under your property insurance policy.
Health Insurance. Quality health care is vital to you and your team. Make sure you clearly understand your responsibilities under the Affordable Care Act, both as an individual and as an employer
Workers’ Compensation Insurance. You need to cover the cost of lost wages and medical expenses when an employee is injured on the job. It also may reduce the likelihood that an employee will sue your company for negligence.
Commercial Auto Insurance. If you or your employees operate a vehicle in the course of doing business, you need to consider commercial auto insurance. Personal policies may not cover any accidents that occur during work.
NOTE: Consult a knowledgeable insurance broker to find out if it is more affordable to combine coverages such as General Liability, Commercial Property, and Business Interruption through a Business Owner’s Policy (BOP).