The whole premise of any business is a calculated risk; it is often a leap of faith, hoping that you get customers for your products or services. Even though business is a risk, having different types of business insurance is one of the best ways to protect yourself and your business while limiting and mitigating losses. But risks in business go beyond losses. You also have to protect yourself from natural disasters, extreme weather conditions, theft, and vandalism. There is also the risk of workplace-related injury and faulty products that could lead to legal action against you and your company. Even though you may not need every type of business insurance coverage, it is important to understand your needs, as this will determine your policies.
In many states, some types of insurance for business owners are mandatory, lack of which could lead to heavy fines and even, in some cases, jail time. But insurance is not just about protecting yourself from legal action or safeguarding your interests; it is about showing you care about your employees, customers, and business. It is a sound business practice that gives you peace of mind and ensures you are focusing on the business and what you love. Let us look at some business insurance covers that every business should have.
Workers’ compensation
Work-related injuries can be detrimental to any business if you do not have workers’ compensation coverage. If your employee gets injured at work, worker compensation insurance ensures their medical bills are paid, and they get replacement income while they recover. Your workers are protected by law while on the clock. It is a legal requirement in all states except Texas. You could receive heavy fines and penalties if you do not have one. As a result, having this cover ensures that your employee waives their right to sue for workplace-related injuries regardless of who is at fault.
Benefits of Workers’ compensation insurance:
- Ensures your employees get good medical care in case of work-related injuries
- They are compensated for their injuries
- Legally protects you; you can’t be sued
- Reduces the chances of you paying for the injuries and costs they incurred out of pocket
Professional Liability
As a business advisor or provider of intellectual property in such volatile economic times, it is important to protect yourself. With digital businesses on the rise, and many others providing services that can affect the outcome of their clients’ ventures, professional liability is crucial. This insurance cover is also known as Error & Emissions (E&O) insurance, and anyone dealing with clients directly or offering advice should have one.
It protects you from improperly providing services, failure to perform, or negligence. Professionals who take this cover include website developers who may create a platform that cannot sustain a business’s traffic, leading to a loss of sales. Financial advisors should also have E&O insurance in case the advice they give leads to losses. Professional liability helps cover the cost of damage or losses the company may face due to your negligence or errors.
Property Insurance
One of the biggest assets for many businesses is their office and the building it is located in. Property insurance protects your business’s physical structure and helps with repairs or rebuilding costs. Property Insurance protects you from damage from natural disasters, fires, smoke, vandalism, and theft. Repairs and rebuilding projects are pricey and can lead to your business redirecting a large chunk of its budget, crippling it in the process.
For businesses that could suffer losses due to damage to their building, it is advisable to take out business interruption property insurance add-ons. This will ensure that you are reimbursed for property damage losses. For example, if you own a salon and one styling booth in your establishment is damaged due to a fire, you will not be able to use it, resulting in fewer clients being served at a go. Such a scenario can reduce your bottom line. Business interruption property insurance add-ons ensure you are properly compensated for the reduced business.
Property Insurance also ensures you are compensated when your establishment temporarily shuts down for repairs, especially after heavy property damage.
General Liability
As the name suggests, General liability covers a wide variety of things, including bodily injuries, property damage, personal injuries, libel or slander, and damage to client property. Since General Liability includes many things, what you can cover varies from state to state. It is a basic cover that gives you an umbrella of protection. However, it is important to couple it with more specific policies. For example, if you are sued for a work-related injury, a general liability policy may not be able to cover all the fees and the settlement due to its low cap.
Business Owner’s Insurance
Another more general cover is the Business owner’s Insurance which bundles common types of property and liability covers. Also known as Business owner’s policy (BOP), this coverage is a great small business insurance option because it offers better rates due to the bundling. However, as the business grows or if you have large cooperation, you may need separate, more defined covers.
Cyber Breach Liability
Today, most businesses carry a lot of personal information about their clients. This helps them understand their clients better and offer personalized customer care, services or products. However, the biggest drawback of having this information is the rise of cyber breaches.
Cyber breach liability protects you from getting sued, penalized, or losing business after a data breach. Information such as your clients’ physical addresses, phone number, medical conditions, and even birthdays should be protected. The rise of cyber breaches has led to some insurance firms offering data consultation services to help you protect your clients’ information.
There are many more insurance covers you can pick for your business. It all depends on the type of business and clients you have. You can pick home-based business insurance if you work from home or commercial business insurance for your growing enterprise. Contact Miller Hanover to learn more about what your business needs.
Filed Under: Insurance