5 types of business insurance and why you need them

Regardless of the size or nature of your business, one thing that remains the same is the need for business insurance. There are many different aspects of your business that you will want to take into consideration when looking for new business insurance – or reviewing your current insurance cover. Since every business is different, each one will have different insurance requirements. For example, a company that produces physical goods may need different insurance than a company that offers services. In both scenarios, there are some similarities, and here are a few types of insurance that all businesses should consider.

Workers’ compensation insurance – for your employees

Workers’ Comp insurance is required by law in almost all states. It can provide coverage for medical expenses and a portion of lost wages for an employee who is injured or ill on the job. Typically, this type of insurance only covers injuries or illness that occur in the workplace – for example, if an employee slips and falls on a wet floor.

Since the laws regarding Workers’ Comp can be different depending on where your business is located, it is important to work with an insurance professional to ensure that you get the coverage required as well as what you need for your particular business.

General liability insurance

General liability insurance is designed to protect you and your business against a variety of claims, including accidents, injuries or claims of negligence. This type of insurance can help pay for things like property damage, medical expenses, defamation, defamation, legal costs, and defective products. No one expects to be sued, but the reality is that it is always a possibility. You don’t want to leave your business open to these types of situations, and the broader the protection, the better.

Professional Liability Insurance – “Errors and Omissions” coverage

Professional Liability Insurance may also be known as “Errors and Omissions Insurance” or “Errors Insurance”. It protects you from lawsuits alleging negligence in providing professional services, providing shoddy work, or making errors or omissions. This type of insurance is especially important if you have a service-based business, but may be necessary for other types of businesses as well. Mistakes happen – so appropriate professional indemnity insurance can be useful, even if you don’t think you’ll need it.

Property insurance

The definition of “property” is broad and can mean different things to different types of businesses. Therefore, it is important to ensure that you have suitable commercial property insurance. Without this type of insurance, most small businesses would not be able to replace their equipment should something happen that causes damage or destruction. Property covered by this type of insurance can include buildings, computers, fixtures, supplies and equipment. There are two types of property insurance: “all-risk” policies cover pretty much everything, and are a good way to avoid overlapping or overlapping coverage, as well as gaps in trying to cover your liabilities. “Peril-specific” policies or “named-peril” coverage applies only to certain perils specifically mentioned in the policy. They are usually needed when there is a high risk in a very specific area.

Life insurance / Key Executive Insurance – protection and benefit

Offering employee life insurance can be a valuable benefit when trying to attract high-quality employees. A company may even offer additional coverage for executives. These employees are considered critical to the operation and success of the business and may sometimes require additional insurance beyond what normal employee benefits provide. This can be another advantage in attracting top talent.

A company may also offer special “Key Person” policies to employees without whom the company could not function. Key person insurance protects against the unexpected death of a key employee – often the benefit amount equals the expected loss of income and the costs required to find and train a suitable replacement. The company pays the premiums and the insurance is considered a business asset.

It is possible to combine some of these basic coverages as a package policy, often referred to as a Business Owner’s Policy or BOP. Many insurance companies bundle certain coverages, and this can save you money as long as you make sure you get the right type of coverage.

Even if you feel that you have sufficient business insurance to meet all of your current needs, it is still advisable to review all of your coverage on an annual basis to ensure that your coverage continues to provide everything you need. This is especially important if you or your business has experienced major changes, such as a change in family status or a significant increase or decrease in business activity. Additionally, be sure to work with a reputable, licensed insurance agent or broker who is knowledgeable about businesses like yours.

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