Business Insurance Considerations
Whether a person is a new business owner or an owner of an existing business, having good business insurance is a must. Regardless of how careful business owners may try to be, their business is still exposed to risk on a daily basis. Natural disasters, lawsuits or various other types of catastrophic events can wipe out a business very quickly without adequate business insurance. As important as it is to have business insurance, it’s equally important to have the right type of insurance. A good business insurance is one that meets the needs of the business.
Property insurance covers not just the business but also the inventory, equipment and furniture in the case of loss resulting from storms, fire, vandalism or theft. Property insurance is important whether the business leases or owns the property in which it’s located. Although property insurance does cover many unforeseen natural disasters, it often does not cover events like earthquakes or floods unless a specific rider is added to the policy. Business owners often purchase business interruption/loss of income insurance as part of their property insurance. This protects the business owner if the business has to close temporarily due to a loss.
Forbes reports that every business, regardless of size or location, needs to have liability insurance. Depending on the type of business, a business owner may need to have both professional liability insurance and product liability insurance. Professional liability insurance, also referred to as errors and omissions insurance, protects the business against lawsuits for negligence due to failing to perform or making mistakes. Professional liability often covers bodily injury and property damage to a third party while on the business owner’s property. Product liability, which is for businesses that manufacture products to be sold on the general market, protects the business from lawsuits stemming from damages one of their products may have caused.
Worker’s compensation is a valuable policy to have when a business has employees because it provides insurance in the form of income to employees who are injured on the job. Although states may vary in the specific laws, every state requires businesses to carry worker’s compensation if they provide their employees with W2 forms. Businesses who are required to carry this insurance and fail to are subject to stiff fines. Worker’s compensation also protects the business from being sued by an employee who was injured on the job.
Vehicle insurance or commercial auto insurance is a necessity if the business uses vehicles for the business. This is especially true if several vehicles are used and are used by employees. Vehicle insurance covers cars, trucks, vans or any type of motorized vehicle used in the operation of the business. It not only protects the vehicles but also covers any equipment or products that may be in the vehicles. Business owners can also purchase a non-owned auto liability policy for employees who drive their own vehicles but do not have insurance.
Related Resource: Top 10 Best Cheap Business Insurance Companies
Getting the right type of business insurance often falls back on finding the right insurance company. Business owners can check out how different insurance companies are rated by J.D. Power. Knowing what type of insurance they need and finding the right company can help ensure business owners have the right business insurance to keep their business secure.