The moment you start a business, you are faced with different types of risks. Surprisingly, about 40% of small businesses don’t have any kind of insurance. When faced with a lawsuit, a workplace injury, or a disaster, they would have no means to mitigate the risk.
There are many types of business insurance covers out there for businesses. For safe and sound operations, you need to decide which ones are must-haves. Here’s a short guide on the various types of insurance you may need.
Business Owners’ Policy
Business Owner’s Policy or BOP is a good place to start for most small businesses. It combines three of the most essential business insurance covers. They include general liability, commercial property, and business income insurance.
You can have your BOP customized with other covers as you deem fit for your business and get one from captive insurance. Please click here to learn more about captive insurance.
General Liability Insurance
The law may not require this, but every business needs a general liability insurance policy. It protects the business from third-party lawsuits from customers, clients, and vendors.
If these people get injured at your property or by your products and services, the insurance will cover the costs. Generally, it covers bodily injuries, property damages, and personal and advertising injuries.
Commercial Property Insurance
Commercial property insurance will protect your business’ office space, equipment, inventory, and other properties against damages. This policy will cover theft, fires, and vandalism.
Some policies will cover some weather-related damages like flooding. Some don’t cover natural disasters like tornadoes or earthquakes.
Workers’ Compensation Insurance
If you have employees, it’s required by law to have workers’ comp insurance to cover employees who get injured on the job. This policy covers the medical expenses and lost wages for the injured employees.
Professional Liability Insurance
Also known as malpractice insurance or errors and omissions insurance. This type of business insurance policy covers professional negligence.
For instance, doctors may misdiagnose patients or make mistakes during surgical procedures. The policy covers the patient lawsuit against them. If a client sues your business due to errors and omissions on your contract, the policy will cover the lawsuit.
Product Liability Insurance
If your business sells tangible products, a product liability policy will protect you from customer lawsuits. You can get it as a stand-alone policy or have it combines with your general liability insurance.
Commercial Auto Insurance
Your commercial auto insurance policy will cover your business vehicles. It’ll cover accidents you or your employees are involved in and will help with any repair costs.
Business Interruption Insurance
If a disaster were to occur, your business operations might be interrupted. Before you resume, your business may lose customers and income due to your inability to work. This type of insurance will cover your losses during such an event and help you recoup.
Different Types of Business Insurance
If you have been wondering what types of business insurance policies you need, this list highlights the most important ones. The policies you choose will highly depend on your type of business and industry. Having the right policy can save you from financial losses due to disasters or lawsuits.
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