MightyRecruiterThere are inherent risks to owning a business. Although it may be impossible to avoid every situation where you may face a loss, having the proper insurance in place can protect your company and its assets. This section outlines the various types of insurance a business needs, and how to purchase a policy.
Liability Insurance
As its name infers, liability insurance covers your business when you are faced with a situation where you may be found responsible for another persons injuries. If a customer gets hurt inside your store, liability insurance is designed to cover your legal costs in the event of a lawsuit. Similarly, if you or a representative of your company causes damage to someone elses property, liability insurance may cover that as well.Some types of businesses require specialized liability insurance coverage. For instance, doctors, lawyers and accountants should have malpractice insurance to provide protection in the event someone sues them for failing to meet their professions standards of conduct. Any business that has a fleet of cars, trucks or vans should have automobile liability coverage. Certain nonprofits and corporations may require directors and officers liability insurance, which covers any legal actions against the entitys directors or officers. Finally, some companies may want to have errors and omissions insurance, releasing them from liability in the event of an inadvertent mistake.
Property Insurance
In the event that your commercial property is damaged by a storm or a fire, property insurance may help to pay for repairs or, in some cases, even replace damaged property. Typically, property insurance will cover the building, grounds, office furniture, equipment, inventory and any fixtures such as lighting and flooring.While minimum coverage may be enough for some businesses, you may wish to consider adding additional protections to your property insurance policies. For example, if you rent your space, the landlord will likely require you to have tenants insurance to cover any damages caused by you or your employees. Business interruption insurance will cover your expenses and provide reimbursement for lost revenue should you have to temporarily close your business for any reason. Crime insurance will cover any lost or stolen property.
Workers Compensation
According to most state requirements, companies that have a certain number of employees must carry workers compensation insurance. If employees are injured during their course of employment, workers compensation insurance will cover certain medical costs and a portion of their lost wages. Regardless of who was at fault for causing the injury, the employee will get paid in most cases. In return, the employer is protected against being sued.
Determining How Much Coverage You Need
It is important to purchase the right amount of insurance for your business. If you are under-insured, you may be left open to losses that could potentially put you out of business. On the other hand, having too much insurance coverage could mean throwing money away that your company could use for something else. When you have an accurate idea of how much your business is worth, it can help you determine how much insurance and protection you will need. In addition to other types of insurances, some companies may choose to purchase umbrella insurance. Filed claims that exceed the upper limits of your policy may be covered by umbrella insurance. These policies provide additional coverage above and beyond your base policy.
Shopping for Policies
While there is a lot of information available online, some business owners may choose to work with an insurance broker, who will shop around for policies on the business owners behalf. It is important to make sure that the broker you use has a deep understanding of your business and its insurance needs.Many policies can be purchased as a bundle, which may be a good way to save money. However, a one-size-fits-all type of policy is not ideal for every company, and some businesses may benefit from a more customized approach. Before purchasing a policy, make sure you understand the coverage limits, deductible amounts and how to file a claim should the need arise. Also keep in mind that your business may change and evolve over time. When it comes time to renew your policies each year, it may be a good idea to review your coverage to see if your need more less protection in certain areas. Every business owner should take the time to analyze his or her companys needs and ensure that the correct forms of insurance coverage are in place. This may protect the business from suffering a serious financial loss should an unexpected event occur.