Business owners run the gauntlet of incidents for every single day they operate. If proper precautions aren’t in place, business owners can be on the wrong side of things before they know it.
The risks posed to a business can be many and include theft, employee mistakes, accidents, injuries, and non-compliance with laws and regulations, to name a few. But even in the face of all of these threats coming at you from all angles, the negatives shouldn’t cause you to avoid the process of setting up a new business. Joining the 5-plus million new companies opened annually in the US each year can help you find a new purpose in life and pursue your dreams.
But being safe while following the journey from inception to success should be something you don’t let slip at any time. Awareness of specific risks faced by the business you are considering starting or have already opened will allow you to put measures in place to avoid any issues and mitigate the damage should the worst happen.
Business Insurance
Business insurance comes in many forms and can offer protection against many business problems. You can get a business insurance quote from a trusted provider that covers you under an umbrella policy or has multiple insurances covered simultaneously from one provider. Having an idea of the type of policies you need and why you need them will allow you to protect your business as you need it. Remember, these are an added protection in case something was to go wrong. If you cannot afford to pay for a lawsuit out of pocket should this happen or cover an accident should a customer hurt themselves when dealing with your company, then you need to be covered by an insurance premium.
This post looks at the different options you have for business insurance.
General Liability Insurance
While general liability insurance isn’t a legal requirement for businesses in the US, it is often thought of as one of your best lines of defense when it comes to protecting your business. You might also find it is called public liability insurance or business liability; they all cover the same things.
Generally, you can expect business liability insurance to cover situations such as copyright infringement, reputational harm, and payout for legal and settlement costs if your company has been accused of either.
Some policies include product liability cover, meaning if a person is harmed by a product or service you sell, you are covered for medical costs incurred by this.
Vehicle Insurance
Auto or vehicle insurance is a must if you spend long periods on the road because your work is heavily travel-based. You need to be covered for any accidents on the road and be able to get back up and running and have your auto repaired or replaced as soon as possible.
Business auto and personal auto insurance are two different things, so you must ensure the policy you take out covers you for the work you are doing and the time spent driving.
Comprehensive cover will cover the costs for both your car and other involved parties in an accident and for repairs sustained to your car by vandalism or theft.
Commercial Property Insurance
This premium will cover your business in the event of a man-made or natural disaster that affects your onsite equipment and operations. Commercial property insurance will cover your building, equipment, and inventory under the policy as long as it is contained within the commercial premises you are operating in. You will be compensated for any downtime under some policies; always check the small print, meaning if you cannot carry out your operations during repairs or waiting for new equipment, you can also claim a portion of lost sales.
You can typically find this insurance bundled in with general liability insurance. While not a legal requirement, many commercial landlords request this be taken out before agreeing to let you rent the premises.
Workers Compensation
Workers compensation coverage is a legal requirement in all states. As an employer, you are responsible for all the premium coverage, and employees are not expected to contribute.
Policies will payout in the event of a claim on a no-fault basis. This means it pays out regardless of employer or employee negligence (although some restrictions exist). Workers compensation coverage will provide payments toward medical expenses, lost income, ongoing care costs, legal expenses, disability expenses, and death. Ensure any policy you take out meets your state requirements for workers’ compensation laws so you have the right coverage.
Health insurance
Did you know that if you employ over 50 staff members, you are legally required to offer health insurance under the Affordable Care Act? For employers with under 50 members of staff, you can access the Small Business Health Plan instead of providing coverage.
Health insurance helps to offset some of the costs of medical treatment for employees and some professional and hospital fees that might be cured, too. The level of coverage you provide can be at your discretion, but generally, the better the health coverage, the more enticing your business will be to employees. For reference, statistics show that companies pay around 83% of an employee’s healthcare costs for a single policy and 72% for family coverage. Estimates bring these figures in at just under $8,000 and $22,500 respectively (source: KFF).
Professional Liability Insurance
Suppose your company is sued for breach of contract, or you are hit with claims for financial losses due to negligence on your part. In that case, professional liability insurance can help cover the associated costs.
Again, this is not a legal requirement for all industries or professions. Still, if you were to fail to deliver on your part of a contract for reasons including unfinished work, misrepresentation, budget overruns, mistakes, or oversights, for example, then this policy will have you covered.
This policy can sometimes be called the errors or omissions insurance or malpractice insurance and is legally required for real estate brokers and realtors, medical practitioners, lawyers, insurance brokers, and government contractors.
If protecting your business is essential to you, looking for the right type of insurance coverage can help you ensure that should anything go wrong, you can use the financial means provided by your policies.
