5 types of business insurance and why you need them

No matter 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 consider when looking for new business insurance or when reviewing your current insurance coverage. Since each business is different, each will have different insurance requirements. For example, a business that produces physical goods may need different insurance than a business that offers services. In either scenario, there are some similarities, and here are some types of insurance that every business should consider.

Workers’ compensation insurance – for your employees

Workers’ compensation insurance is a legal requirement in almost every state. It can provide coverage for medical costs and a portion of lost wages for an employee who is injured or becomes ill on the job. Typically, this type of insurance only covers injuries or illnesses that occur in the workplace, for example, if an employee slips and falls on a wet floor.

Since the laws pertaining to workers’ compensation can be different depending on the location of your business, it is important to work with an insurance professional to make sure you get the required coverage, as well as the coverage you need for your particular business.

General liability insurance

General liability insurance is designed to protect you and your business from a variety of claims, including accidents, injuries, or negligence claims. This type of insurance can help pay for things like property damage, medical bills, 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 company open to these kinds of situations, and the more extensive the protection, the better.

Professional liability insurance: “errors and omissions” coverage

Professional liability insurance is also known as “errors and omissions insurance” or “negligence insurance.” It protects you from lawsuits alleging negligence in rendering professional services, poor quality work, or making mistakes or omissions. This type of insurance is particularly important if you are running a service-based business, but it may also be necessary for other types of businesses. Mistakes do happen, so proper professional liability insurance can be helpful, even if you think you won’t need it.

Property insurance

The definition of “property” is broad and can mean different things to different types of businesses. That is why it is important to make sure you have adequate commercial property insurance. Without this type of insurance, most small businesses would not be able to replace their equipment in the event of something happening that caused damage or destruction. Property covered by this type of insurance can include buildings, computers, inventory, supplies, and equipment. There are two types of homeowners insurance: “Comprehensive” policies cover almost everything and are a good way to avoid duplicating or overlapping coverage, as well as gaps when trying to cover your liabilities. “Specific peril” policies or “named peril” coverage apply only to particular perils that are specifically mentioned in the policy. They are usually needed when there is a high risk in a very particular area.

Life insurance / Key executive insurance: protection and benefit

Offering life insurance to employees can be a valuable benefit when it comes to attracting 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 at times require additional insurance beyond what normal employee benefits provide. This can be another benefit to attract the best talent.

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

Some of these basic coverages can be combined as a bundle policy, often referred to as a business owner 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 think you have adequate commercial insurance coverage that meets all of your current needs, it is advisable to review all of your coverage annually, to ensure that your coverage continues to provide everything you need. This is particularly important if you or your business have experienced major changes, such as a change in family status or a significant increase or decrease in business activity. Also, be sure to work with a licensed and accredited insurance agent or broker who is knowledgeable about businesses like yours.

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