What Types of Insurance Should Your Business Have?
You wouldn’t get into your car if you didn’t have auto insurance. You wouldn’t be comfortable owning a house without at least a basic home insurance plan. If you want to protect your business, business insurance is just as important—but there are many types of insurance available, and if you’re not familiar with the terminology and services involved, it can all seem a bit complicated.
So what types of business insurance are most important, and which policies should you get?
General Liability Insurance
General liability insurance protects your business for a broad range of circumstances. It provides protection against harm that your business causes through mistakes or a failure to perform. For example, if one of your truck drivers makes a mistake that causes an accident, and a victim of that crash sues your company, general liability insurance could protect you, covering the damages. If a customer slips and falls in your store, without adequate signage to warn them of the conditions, liability insurance could protect you as well.
Different industries have different suggestions and requirements for general liability insurance; for example, if your business is exclusively online, you won’t need a policy that covers in-store accidents. However, almost all businesses need a blanket general liability policy to cover them for the miscellaneous events that could unfold.
Property insurance for businesses works much like property insurance for homeowners, and is highly recommended for businesses that own their stores, offices, warehouses, and factories. Property insurance coverage varies, depending on your provider and how much you’re willing to pay, but will generally cover damage to your property in the event of accidents, inclement weather conditions, or other similar circumstances.
Workers’ Compensation Insurance
Workers’ compensation insurance is an insurance policy that protects your employees, should they suffer an injury while on the job. This insurance policy will cover their medical costs, as well as disability and death benefits, should the need arise. Workers’ compensation is a legal requirement of businesses in many states, though specific state laws vary. Even low-risk occupations should have workers’ compensation insurance, as slips and other accidents can happen anywhere.
Product Liability Insurance
General liability insurance will cover most of your business needs, but product liability insurance will apply specifically to one or more of your company’s core products. If you’re producing and mass manufacturing something for personal customer use, or industrial use, it’s a good idea to have a product liability policy in place to protect you from lawsuits and damages resulting from the inherent dangers of using your products.
If your company isn’t running any vehicles, you won’t need to worry about vehicle insurance for your business. If you do have company cars, you’ll need policies for them. Business vehicle insurance works almost exactly the way residential vehicle insurance does—you may need to consider some secondary and tertiary variables, and you may need to pay a bit more, but this form of insurance should still be intuitive for you.
Business Interruption Insurance
Though not strictly “necessary” like some of the other insurance policies on this list, business interruption insurance is still good to have. This insurance policy covers your business in the event it isn’t able to maintain operations for a given period of time. For example, if an earthquake renders your business inoperable, business interruption insurance could kick in and provide you with the stream of revenue you’d otherwise be getting. The length of time and the amount of money will depend on the specifics of your policy.
How to Find the Best Policy
These are the most important types of insurance to consider, but how can you find the best policy?
- Shop around. This should go without saying, but shop around for different insurance policy options before making your final decision. You may be able to find a much better deal.
- Compare apples to apples. When comparing insurance policies from different providers, make sure you’re comparing similar terms and conditions; there are so many variables in the insurance industry, it would be easy to overlook a key detail responsible for a significant price difference.
- Consolidate your policies. If you can, try to get most of your policies through the same provider. This will make it easier to manage your policies, plus, you’ll probably qualify for special discounts when you purchase multiple policies.
- Balance risk and reward. Every insurance policy you buy is going to cost your business money every month, but it could protect you in the event of a negative incident. Understand the risks your taking, and how much you’re willing to sacrifice to prevent a disaster in each area.
Every business is different, and will require a different suite of insurance services. Use these tips to find the best policies for your brand.
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