Insurance is something some people overlook, thinking this might just be another unnecessary expense. But for most people, insurance is a safety net they can depend on when things go south. That’s why various businesses don’t run or open without insurance coverage.
Getting business insurance is an efficient way to protect your company. As a business owner, you’re faced with tons of dangers and risks daily, some of which can be your business’s demise. That’s why it’s essential to get your business insured.
Business insurance can protect your business from various things such as lawsuits, theft, vandalism, financial losses, property damage and even employee and customer injuries and illnesses. To know more about what business insurance is, then keep reading!
What does business insurance cover?
Since you already got a gist of sectors business insurance can cover, you can now know more about it. However, to know what business insurance can cover, you first have to know what your business needs. This is because different types of businesses face different kinds of risks, so you might not have the same needs.
So to know what business insurance is for you, you need to determine this based on your business’s size, industry, location and number of employees. After doing so, you can pick out insurance coverage perfectly suited for your business.
Business insurance covers various aspects such as your business’s property, your employees, unpredictable risks and even injuries and errors caused by your company. So business insurance isn’t just one big force field, there are multiple ones to consider.
What are the main types of business insurance?
There are 4 main kinds of business insurance which are liability policies, property policies, employee policies and risk management. Each of these plays such a huge role in protecting your business. To help you grasp what they’re for, here’s a rundown on each one:
This insurance policy covers various risks that happen on the job or within your business premises such as errors or omissions, advertising injury, bodily injury and even property damage. Without the right coverage, you could suffer major losses when faced with these issues.
To get you well acquainted with this insurance policy, you first have to know its 4 kinds:
General liability – This keeps your business protected from claims of property damage and bodily injury. Without this policy, you have to shoulder everything, including medical, hospital and so on.
Professional liability – This policy will protect your business from mishaps, injury or error during a service that clients can sue you for. Without this policy, you could potentially lose great sums of money out of pocket.
Directors and officers’ liability – This policy will protect the assets of your directors and officers in cases they allege improper management and get sued by clients, employees, investors, vendors, competitors and so on.
Commercial umbrella liability – This policy acts as extra financial coverage when a claim is larger than the given coverage you’re provided by other liability plans.
This insurance policy can protect your business from property damage caused by fires, floods, earthquakes, typhoons and so on. This is essential for all businesses to have since getting back up from property damage can be hard, and might even be impossible.
It’s said by the Federal Emergency Management Agency that about 40% to 60% of businesses never open back up after a disaster. Getting this policy will help you repair and replace any damages caused by accidents or natural calamities.
Not all businesses have this insurance policy, simply because not all businesses have employees. But if you do, you might want to consider getting this policy for the sake of your business and employees. And depending on what state you’re in, this might even be a requirement.
This is also called workers’ compensation insurance. This takes care of your employees’ needs, including family benefits, hospital and medical charges associated with work-related injuries, and other things.
There are certain aspects that can also affect this policy’s cost such as payroll size, claims history and job risk. Employees who get injured during an unrelated work event or while breaking work rules are not subject to this policy.
Plus this insurance policy can also protect you from lawsuits filed by one of your own employees.
Risk management Policies
Last but not least is risk management policies. This insurance policy is a practice of knowing the risks your company can and might face in the future. So no risk management policies are alike. These are designed to focus on what ‘your’ business needs the most.
So it basically acts as a precautionary guide to reduce or curb possible risks known around your area, industry, company size and number of employees. This policy will consist of risk avoidance, shifting risks, risk reduction and risk assumption.