There are several types of insurances for business protection. Insurance may serve different purposes, but they are primarily designed to protect the company from several risks that can occur during regular operations. Choosing the proper insurance for your business may seem overwhelming, but fret not! This article will provide valuable insights into different types of business insurance.
In many cases, small businesses start with basic insurance policies that cover three critical things:
- Commercial property insurance
- Business income insurance
- General liability insurance
What’s great is that many insurance providers offer customizable policies so you can have more protection. In other terms, you don’t need to pay for insurance coverage you don’t even need.
As you may know, every business is unique and require different needs. So here are the different types of business insurance you can get for your company’s protection.
Different Types of Insurance Policies
Your insurance needs will depend on the nature of your business. Keep in mind that you don’t need to get every insurance policy out there, just the ones that your company needs.
And even though there are various types of business insurance, listed below are the common policies perfect for small businesses.
Commercial Property Insurance
The type of insurance that protects your building and the equipment you use for business operations is called commercial property insurance. In most cases, this insurance doesn’t cover damages caused by natural calamities like floods or earthquakes, so you might need to get a separate policy for that.
Professional Liability Insurance
Professional liability insurance protects you from lawsuits declaring you’ve made an error in the services or products you provided. Also known as errors and omissions, this insurance helps you save tons of money you might lose in the legal process.
General Liability Insurance
General liability insurance is probably an essential kind of insurance. It protects businesses from different claims that it has caused, including:
- Injury to someone outside the company
- Damage to another person’s properties
- Personal libel, like slander or libel
If you get a call from a truck accident attorney claiming one of your business trucks has injured someone, this is the insurance you need to pull out from your files.
Business Income Insurance
Business income insurance ensures that your lost income from damaged property or equipment is replaced. The idea is to help the insured business pay for ongoing expenses, such as payroll, utility bills, and rent. Other providers call this insurance “business interruption insurance.”
Worker’s Compensation Insurance
Providing worker’s compensation insurance for your employees is a great way to help them when they get sick or hurt from work. These benefits you provide can help your employees in the following circumstances:
- Pay their medical expenses
- Replace their lost income if they can’t go to work
- Cover funeral costs if they passed away due to work-related causes
- Pay for physical therapy or ongoing care
Many states require companies to provide worker’s compensation insurance. If you don’t carry one, you might end up facing criminal charges, penalties, and fines.
Commercial Umbrella Insurance
Commercial umbrella insurance lengthens the coverage limits in specific liability policies. In other terms, if a claim surpasses the limits of your policy, the company’s umbrella insurance can cover the excess.
Data Breach Insurance
Data breach insurance helps the business respond to data breach situations where sensitive information gets stolen. Others call this policy cyber insurance. This type of business insurance can help you pay expenses, such as:
- Costs in notifying involved individuals
- Create a public campaign
- Offer monitoring services for identity theft
Commercial Auto Insurance
Commercial auto insurance protects you and your employees whenever you drive company vehicles for business purposes. The insurance can cover bodily injury claims and property damage from an accident caused by a company-owned car. It’s important to have this one because your personal car insurance is of no use and cannot cover third-party claims in accidents caused by your business car.
The Importance of Business Insurance
Here’s why you need to have business insurance.
-
- Required by law
- Protects you and your employees
- Protects your customers
- Builds your business’s credibility
- Some contracts require business insurance
- Helps in retaining and recruiting employees
- Protects the organization
- Protects the company from natural disasters
- Helps you in lawsuits
- Provides peace of mind
In general, getting the right kind of insurance for your business is critical. It can help you build a solid foundation, especially if you’re new in the industry. However, business insurance is just as crucial for seasoned entrepreneurs because, over time, your company’s needs may change.
So make sure always to check the kind of protection your company needs. As mentioned, the type of insurance you need will vary depending on the industry you belong to. If you’re not sure about the right insurance for your business, it will be wise to consult a professional.
