As a business owner, one of the most important things you have to secure is insurance. Owning a business comes with its fair share of risks, unexpected costs, and unforeseen consequences. While there are basic business insurance packages, it’s important to note other kinds of specialized types like commercial truck insurance, cyber liability insurance, and the like.
Knowing the difference between the numerous kinds of business insurance will allow you to make sure that you are getting the right coverage for your company. Although your chosen business structure can protect you against lawsuits, these are typically confined to protection of personal property.
Business insurance, on the other hand, encompasses both personal and business assets. Business News Daily notes that since this offers both financial and legal protection, business insurance literally ensures that you can operate your company despite unforeseen events — even those that occur on the daily.
Thorough analysis of your company and potential risks is worthwhile if it means long-term safety, security, and success. Here’s all you need to know about business insurance:
If you are new to the process, the US Small Business Administration has listed four steps to simplify the process for you. This streamlined procedure should then become a yearly practice to ensure that your business is always ready, no matter what occurs.
The steps for purchasing business insurance are as follows:
Take some time to imagine a contingency plan for the types of natural disasters, accidents, or lawsuits that may fall on your business’ lap and cause damage. Note these down to prepare you for the next step.
Qualified agents can help with the previous step and match you with policies that are suited to your particular business needs. Be sure to find an agent who is reputable and cares deeply about your needs as much as their own. Agents often get a commission for their work with your company.
Do not rush to secure a business insurance policy immediately. This should take careful consideration and planning. Since prices and benefits may vary, compare rates and terms to ensure you get the best value and deal.
Business growth may incur greater liabilities. Each year, you should review your expansion and re-assess how you should go about changing your insurance policies to see how these will affect your business.
Bigger businesses that already have a hefty amount of physical assets or property will need this type of insurance. Commercial property insurance protects a business’ property from phenomena such as smoke, fire, natural disaster, vandalism, and civil disobedience.
This form of financial protection is ideal for the ownership or even rental of commercial spaces because of the aforementioned factors that are beyond your control. Note, however, that this may not always include coverage for the breakdown of equipment.
Depending on your company’s unique needs and status, there are various types of coverage for property insurance.
This broad category covers bodily injuries, medical expenses, property damage, slander, libel, defending lawsuits, and matters regarding settlement judgments and bonds.
Keep in mind that this covers injuries done to your customers, damages to client property, and similar lawsuits.
Business owner’s policy is catered towards both small businesses and home-based businesses.
This policy is a package that includes the usual business coverage choices, saving resources and breaking down the insurance buying procedure. A BOP may also consolidate both your general liability insurance and your commercial property protection policy under a package at a cheaper premium rate.
Your company’s movable assets like office supplies, furniture, computers and accessories, and machinery for manufacturing and production are included here.
In the unfortunate event of unprecedented or forced business closure because of property-related incidents, business interruption insurance may be needed.
Movable business properties that may be temporarily in your company’s care may need inland marine insurance. Examples of these include museum artwork or precious items sold in a store.
It is recommended if you find that your business is mobile or frequently moves from location to location.
Geared towards businesses who provide services, this type of business insurance protects against financial losses that arise from circumstances relating to negligence, errors, and malpractice.
Home-based business insurance may come in handy for those who have put up their own small businesses over the course of the lockdown. It is often added to homeowner’s insurance to protect small amounts of business equipment or liabilities that emerge from third-party injuries.
Those who are involved in manufacturing, wholesale, distribution, and retail need product liability insurance in the case that a certain product is defective and may lead to bodily harm or injury in customers.
Otherwise known as trucking insurance, and falling under the wider category of commercial vehicle insurance, this policy is made to cover business trucking needs. Assured Standard notes that commercial truck insurance covers the following types of trucks:
To operate a truck, you will need primary liability and general liability insurance. Primary liability insurance will cover potential property damage, injuries, and freight damage caused by the truck.
General liability insurance can pay for damages done on properties with the presence of the truck, and can also safeguard your business from legal matters.
This type of insurance covers the costs of employees who need to take time off their jobs due to work-related illnesses or injuries. It includes wage and health benefits. Depending on the state, the policy and benefits may differ.
Workers’ compensation may be understood as a social insurance reliant on the social contract made between management and employees. When business owners purchase this, it can guarantee protection from civil lawsuits from the possible emergencies that arise from employees’ injuries or illnesses that occur on the job.
Filing for this is a petition for benefits, and it is imperative that you review state laws and legislation to better grasp the prerequisites needed. In the long-term, workers’ comp also assists affected employees in returning to work.
As most, if not all, of today’s businesses operate with digital tools, securing cyber liability insurance is a must. Loads of pertinent data may be stored in your business hardware and cloud-based servers, posing the risk for cyberattacks.
Since data and security breaches as well as cyberattacks are common occurrences these days, cyber liability insurance can be a helpful form of coverage. These attacks can cost you not only severe financial losses, but may be detrimental to your overall business operations and client relationships.
There are two types of coverage for cyber liability insurance coverage:
If you have not already been convinced, remember that regardless of the nature and industry of your company, there is unmistakable value in getting business insurance. Businesses grow and change over time, and they may be subject to events beyond your control.
As a business owner, it is your responsibility to educate yourself on the need for business insurance. Business trial owner and OSHA trainer Gregory Boop says that it may also be helpful to consult other business owners within your industry about their insurance choices to give you a good idea of what you should opt for.
At the end of the day, you know the ins and outs of your business the best. Collaborating with a licensed agent will only help you further, especially if you want to secure all possible bases. Purchasing business insurance means that you care about investing in your clients and your people.
Moreover, securing business insurance also bolsters your credibility. The people you work with and work for may view you as more trustworthy when they know that you take managing risks seriously. If you are eventually looking to expand your company, business insurance can even be a deal breaker for attracting new workers, while retaining existing employees.
Running a business has inherent, everyday risks. You should not have to wait until something nefarious or unexpected occurs before you jump to finding a solution. Your future self will thank you for your decision to protect it, as early as its conception. Business insurance protects you from a great deal of stress and wasted resources.
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William Parker is a program administrator. He is very attentive to detail and has strong organizational skills. He studied Business Administration at Marymount California University.