When it comes to starting a business, there are several things that people tend to either ignore or completely forget about. From day one of starting a business, the owner will have exposed himself to certain risks. Yes even before the first employee is hired, the business is at risk.
It only takes one catastrophic event or lawsuit to wipe out a small business before it even had the chance to get off the ground. Luckily, in today’s world, businesses have access to a very wide range of insurance types that are meant to protect them against these risks and possible dangers. Here are some of the insurance types that all businesses need to have in place as soon as possible.
Professional Liability Insurance.
Professional liability insurance is also known as Errors and Omissions (E&O). It covers the business against negligence claims that could arise due to harm that was a result of the business failing to perform like they were supposed to. There is not a one- size- fits- all policy when it comes to professional liability insurance. This gives each industry its own set of concerns that will be addressed in a policy that is customized for each business. A lot of new business owners tend to ask if they even need any form of professional liability insurance and the answer is absolute. This especially goes for the business that deals with high- risk activities like construction.
It does not matter if a business leases or owns its space, property insurance is a must-have. This kind of insurance covers things like signage, equipment, furniture, and any other kind of inventory that might get lost in the event of a bad storm, fire, or break-in. Granted, you should know that mass- destruction events like earthquakes and floods are not covered by the standard property insurance policies normally. If your business is in an area that is prone to issues like these, you will need to check with your insurer to price this on a separate policy. This makes it ever so important to have the right building insurance in place from the get-go.
Workers’ Compensation Insurance
After a business has hired their first employee, they should add Workers’ Compensation Insurance to their insurance policy. This will cover things like disability, medical treatment, and even death benefits if an employee gets injured or dies as a result of working his or her job within the business. This is important to have even if the employees are doing tasks that seem very low- risk. Things like a slip- and- fall injuries or even medical conditions like carpal tunnel syndrome that might pop up after being on the job for a while are covered by this kind of insurance.
Many of the big brands you see in the world now- a- days actually began in someone’s home. Unfortunately, most homeowner’s policies will not cover a home-based business as a commercial property insurance company would. If you are operating your own business out of your home, you should ask your insurer if they are able to give you any additional insurance to help cover your inventory and equipment if a problem were to arise.
When people decide to start running their own business out of their home, they tend to think that their existing insurance will just automatically pick everything up if something were to happen. That is not always the case. If you do not have your home business insured then you run the risk of having to pay for health- care cost if one of your customers gets hurt while using your products.
Product Liability Insurance
If you own a business that manufactures products to sell on the general market, you need to make sure that you have liability insurance. Even when businesses do everything they can to make sure that their products are safe sometimes find themselves in a lawsuit because of the damages that were caused by one of their products. Product Liability Insurance is there to protect the business when cases like this arise. The coverage of Product Liability Insurance is also able to be tailored depending on the specific needs of the business.
If the employees will be using company vehicles, then they should be fully insured as well. This is to protect the business if an accident were to happen in their company vehicles. If the employees will be using their personal vehicles, then their own personal insurance should do just fine.
Business Interruption Insurance
If something drastic happens, chances are the business’s operations will be interrupted. During this time, the business will likely suffer lost income and product recall. Interruption Insurance is there to compensate the business for their lost income while they are bouncing back from the drastic event.