7 Types Of Insurance Business Owners Need
Starting a business is not an easy road. From the very first day an entrepreneur commences a company, he is vulnerable to some perils. Catastrophic events and lawsuits are inevitable from happening in the business world. If neglected and no actions are being made, it might lead to bankruptcy even before one has the chance to set it into motion. Luckily, businesses now have a broad range of insurances to secure them against these perils. The following are the must-have kind of insurance a company should have:
PROFESSIONAL LIABILITY INSURANCE
It is usually known as errors and omissions (E&O) insurance. The insurance company covers this against the laxity and claims initiated by the clients due to malpractice and negligence. There is no universal policy for professional liability insurance. A set of concerns will be addressed in a customized policy written for a business for each industry.
Businesses that owns or leases their space must have property insurance. Property insurance covers the physical property of a company from the perils such as stolen items, damaged equipment caused by fires, and windstorm. It also includes homeowner’s insurance and renters insurance, but it does not cover mass-destruction events like flood and earthquake damage.
WORKERS’ COMPENSATION PERFORMANCE
This type of insurance covers employees who are harmed or even die due to his work. It includes the medical treatment, disability, and death benefits of an employee. This insurance should be added to the business’s insurance policy as soon as the first employee is hired.
There are a number of professionals who start their small businesses in their own homes. Home-based businesses depend on their homeowner’s insurances to cover the damaged equipment, and also the lost and stolen items. However, home insurance does not cover the way commercial insurance does. To ensure the liability to cover certain damages of equipment in your home-based businesses, ask your insurer for supplementary insurance.
PRODUCT LIABILITY INSURANCE
Business owners whose businesses manufacture products in the market for sale are responsible for the products they are selling and making. Even if they had already taken every measure possible, including making sure the products are safe, there’s always a potential for something to go wrong. If this happens, one might need a lawyer for the lawsuit due to damages caused by the product. Business owners are accountable for any damaged product purchased by the customers; therefore, product liability insurance is a must. It can help lessen the loss caused by this kind of situation. The product liability insurance works to protect a business by ensuring that if this case happens, a company doesn’t have to pay any more for matters such as legal or court costs.
The primary use of this insurance is to provide financial protection for road vehicles such as cars, trucks, motorcycles, and others. Vehicle insurance protects the company against liability, especially if an employee is using a company vehicle during the accident. If employees are using their own transportation for business, and an accident happened, their personal insurance will cover them.
BUSINESS INTERRUPTION INSURANCE
In some unfortunate or catastrophic events, the operations of some businesses will most likely be interrupted. Interrupted business operations due to some devastating events will suffer a loss of income mainly because the workers could no longer perform their tasks in the office, produce products, or make sales calls anymore. This type of insurance covers the loss of income after some catastrophic events. It includes operating expenses and even loan payments.
Having the correct insurance in place will help a business in keeping away from having a significant financial loss. Make sure to check with your insurer or your financial advisor and be advised what forms of insurance are suited for the type of business you have and set up those plans as soon as possible.
Based on Materials from Entrepreneur