5 Types of Insurance that Your New Business Needs
Every business, big or small is vulnerable to risks that could arise from a range of unexpected events, say insurance experts like James McAluney. Having the appropriate insurance can protect you against these risks. You might not want to invest in expensive insurance and pay out yearly premiums for protection against events that may or may not occur. However, a single incidence of fire, theft, accident, or lawsuit by an employee or a disgruntled customer can result in a severe setback to your startup business in its fledgling stage. And, perhaps, make a dent in your personal assets. Here are some of the most important insurance plans you need to buy for your small business.
Business Owner’s Policy
The Business Owner’s Policy is an all-inclusive package that can include insurance coverage like crime, liability, vehicle, property, and business interruption protection. By purchasing this insurance, say experts like Jim McAluney, you can reduce the premium you’ll be paying. In addition, you can choose the specific insurances in the package according to the requirements of your business.
1. Crime Insurance: Crime Insurance, also known as fidelity insurance protects your business from criminal acts such as theft, robbery, computer fraud, leaking of confidential customer information by computer security breaches, employee fraud, and extortion, among others.
2. Liability Insurance: Whether your business provides products or services, you’re held liable if they don’t perform as expected. For instance, your customers expect that your products are safe to use or that the professionals they hire are experts and will provide excellent services. You could face lawsuits against which you’ll need Product Liability or Professional Liability Insurance, respectively. If your workers or the products you’ve delivered cause injury or damage to the property of a third person, you’ll need insurance coverage to help you with the costs of the lawsuit and damages, if any.
3. Vehicle Insurance: If your business uses vehicles such as vans, cars, trucks, SUVs or any other, you’ll need to insure them against liabilities arising from accidents. These vehicles could make deliveries or transport workers and equipment. But, if they cause injury to any third party, you’ll be held liable. Your employees could use their personal cars for company work. Make sure that you buy the appropriate non-owned auto liability insurance for them.
4. Property Insurance: Whether you’re operating out of an owned or rented premises, you’ll need property insurance to protect your inventory and goods, signage, furniture, computers, tools, equipment, office supplies, and any other property. This insurance could safeguard you against damages caused due to storms, thefts, vandalism, and fire and smoke. However, these policies do not protect you against natural disasters, and you might need to buy protection for these events separately.
5. Business Interruption Insurance: Also called Loss of Earning Insurance, this form of insurance protects you against the losses you might incur if business operations are put on hold for a while because of some unavoidable circumstances. These calamities or crisis could hamper production, marketing, delivery, or any other business activities.
Other Insurance
In addition to these important insurances, you’ll also need Workers’ Compensation Insurance. This insurance will cover your business against claims made by employees in case they are involved in an incident in the workplace. An incident could cause death or severe injury which could incur medical and disability benefits costs.
When buying insurance for your business, make the necessary inquiries to check for the rules and regulations of your state and buy the mandatory protection.