You Need this Insurance to Protect Your Business

Insurance to Protect Your Businesses

     If you own a small business, you have a lot of options when it comes to business insurance. And no small business owner wants to address a problem with their insurance.

Business Insurance What is it?

Business insurance coverage serves to protect the business from losses due to events that may occur during normal business. There are several kinds of insurance for your small businesses including coverage for property damage, legal liability, and employee-related risks. (investopedia)

Types of Insurance Needed for Small Businesses

What kind of Insurance do you need to protect your business? The type of business insurance coverage you need for your small business depends on what your company does, and the circumstances in which you are located. State laws require multiple small business insurance policies and it's up to you to ensure that you have the right to coverage.

Without the right type of small business insurance, you may have to pay for the various claims that could occur. Many small businesses do not have the resources or capital to cover claims, which means they may not be able to survive. That's why small business insurance is such an important investment to protect your company.

The following are the most common types of insurance for small businesses:

General liability insurance

General liability insurance is a core component of business insurance and is best purchased and widely purchased as part of a business owner policy (BOP). This coverage primarily protects you against lawsuits and claims from people outside your company.

Business owners buy this general liability insurance to cover legal hassles due to accident, injury, and negligence claims. This policy protects against payments as a result of bodily injury, property damage, medical costs, defamation of the company, costs of defending lawsuits, and settlement bonds or judgments required throughout the appeals procedure.

Professional liability insurance

Professional liability insurance protects you as the business owner from customers who may seek to sue you for any injury or damage incurred or perceived. This type of liability insurance complements your BOP coverage by insuring events or incidents that are not covered by general liability. Special coverage can also be added to your policy to cover industry-related incidents.

Product liability insurance

Companies that manufacture, distribute, wholesale, and retail the products may be responsible for their safety. Product liability insurance protects against financial loss as a result of a product defect that causes bodily injury. The amount of insurance you have to buy depends on the product you are selling or producing. Clothing stores carry much less risk than small hardware stores, for example.

Home-based business insurance

Contrary to popular belief, homeowners insurance policies generally do not cover the losses of a home-based business. Depending on your business risk, you can add a motorist to your landlord's policy to cover normal business risks such as property damage. However, a homeowner's policy only goes so far as to cover a home-based business, and you may need to purchase additional policies to cover other risks, such as general and professional liability.

Commercial property insurance

Property insurance covers everything related to loss and damage to company property due to events such as fire, hurricanes and hailstorms, civil disobedience, and vandalism. The definition of "property" is broad, and includes lost income, business interruption, computers, buildings, company documents, and money.

A property insurance policy has 2 basic forms:

1. An all-risk policy that covers a variety of incidents and hazards, except for particular things stated in the policy.

2. Peril special policy that covers losses only from peril listed in the policy. Examples of special hazard policies include fire, crime, flood, and business interruption insurance. All-risk policies commonly cover the risks faced by regular small businesses, whereas peril-specific policies are usually purchased when there is a high risk of harm in a particular area. Consult your insurance broker about the type of property insurance business that is most suitable for your small business.

Do You Need Working From Home Business Insurance?

While it's not a requirement to have business insurance while working from home, several different types of insurance might be worth considering.

If you work from home regularly, you may want to start thinking about your home insurance. Working from home doesn't necessarily mean that you need to take on different coverage, but you do need to make sure your insurance company understands your situation.

For example, if you keep stock or expensive equipment in your home, it should be protected against theft or damage. If you offer online services or handle client data, you may want to consider professional indemnification insurance. If you have clients who visit your home for a meeting, public liability insurance will offer coverage if they get into an accident, or get injured while you're at your place.

Remember, if you run a work-from-home business, you will need to have appropriate commercial property insurance.

What isn’t Covered by These Insurance Policies?

Some risks are excluded from the normal insurance policy and may require additional special insurance plans. For example, natural disasters such as earthquakes or floods are usually excluded because they cause substantial damage to a relatively small geographic area, and it is not financially feasible for insurance companies to offer standard coverage for these types of events. Infectious diseases are also excluded, as their impact is unpredictable and has the potential to affect the entire country

If you want to be protected from these perils, you should talk to your insurance broker, so they can advise you on how to get special coverage. Some risks are not completely insurable. Most types of business insurance cannot insure the commercial property against damage caused by war, radioactive fallout, or government foreclosure, for example.