In a perfect world, your new business would flourish without any issues. All your hard work would not be threatened by natural disasters, thieving employees, and imperfect products.
Unfortunately, it’s not a perfect world. That’s why we have insurance policies. Businesses should carry a minimum of the following policies if they want to be fully protected when things go wrong.
6 Insurance Policies Your Business Should Have
This is the very basic type of insurance all businesses need. It’s protection from basic claims that may be put against your company. It will cover medical expenses, negligence claims, accidents on your property, attorney fees, property damage, and more. It’s basically there to protect you from lawsuits relating to your property and anything that happens there.
General liability plans are straightforward, and you can use a one-size-fits-all plan to be fully protected. However, there are options for customization if you have unique business circumstances.
Commercial property insurance is designed to protect your place of business in the result of damages or problems with the property. Typically, this insurance will cover the building where you do business, the land it’s on, and in most cases, certain assets such as computers, supplies, and equipment.
If you are renting a property, check with your landlord to see what his/her property insurance covers. You may want to take out your own policy to cover any gaps in the policy provided.
If you’re running a business out of your home or garage, it’s still a good idea to buy commercial property insurance. Your homeowner’s insurance company may refuse to pay for damages to business-related property, or it may be inadequate for claims made against you.
Commercial Car Insurance (If Applicable)
This only applies to those that use vehicles for work. Even if you’re using your personal vehicle for part-time work-related events, you’ll want commercial vehicle insurance to cover it. That way, your business and personal life are kept separate, and your personal assets can’t be touched in the event of a car accident that results in a personal injury lawsuit.
Workers’ Compensation Insurance
You need insurance that protects your valued employees in the result of an accident. This is especially important if you work in a high-risk industry such as manual labor or manufacturing. Accidents are common in these industries, and the payout is expensive. Workers’ compensation protects your company while ensuring that your employees are treated fairly.
It’s also essential in an office or other low-risk environments, even though the potential injuries aren’t quite as obvious. An employee might develop carpal tunnel syndrome from typing too often, chronic migraines from staring at a screen, or back issues from hunching over a desk that’s not ergonomically designed. Your worker’s compensation policy will cover all these issues and more.
Business Interruption Insurance
Business interruption insurance is not a necessary policy for running a successful business. Many small business owners skip this optional policy to keep their bottom lines low. However, you’ll want to consider the pros and cons, as it can be an excellent policy for preventing significant losses.
This coverage is designed to cover lost business income as a result of an event that interrupts business as usual. For example, a fire or natural disaster could keep you out of business for several weeks. As a small business owner, this could be detrimental to your overall success.
It’s not worthwhile for all business owners, but if you live in an area where natural disasters are common (such as coastal Florida, New Orleans, California, etc.), this policy would be a savvy add-on.
Professional Liability Insurance
This policy is also known as “error and omissions” coverage. It protects you and your business from any claims relating to negligence, whether it’s an improperly performing product or a bad customer service experience.
Professional liability insurance policies vary, and you’ll want to customize your own policy to meet your needs. When speaking with an insurance agent, address your main concerns. Your agent may also suggest other concerns that can be covered in a customized policy.
Small businesses must always protect themselves if they wish to stay competitive. There are plenty of challenges of running a successful business—don’t let inadequate insurance protection be one of them.