Doing business is a risky job. From the first day when the business owner starts his business, he is exposed to some risks. So it is important for a business owner to have the right kind of insurance that will protect him from lawsuits or unexpected events. One lawsuit or unexpected event can finish a business even before it starts. Luckily businesses have a wide range of insurance policies to protect themselves from such problems. Let us discuss some insurance policies that will keep your business safe!
11 Insurance Policies that will keep your business safe!
#1. Property Insurance:
This type of insurance policy covers equipment, furniture, inventory, tools, etc. from events like fire, storm, and theft. It helps to protect your business’s building and personal properties. Although events like floods, earthquakes are generally not covered in this type of insurance.
Also read: Everything you need to know about Commercial Property Insurance
If your business is situated in those areas that are prone to this type of incidents then you should consult with your insurer for a separate insurance policy. Some of the good business property insurance companies are AllState, MetLife, etc.
#2. Professional Liability Insurance:
Professional liability insurance is also known as errors and omission (E & O) insurance covers a business against negligence claims resulting from mistakes and failure. For example, if your business makes a major error and it costs the client thousands of dollars. This type of policy will help you to cover the cost of the client if he makes a claim. If there is no mistake from your side and the customer sues you in that case, this type of policy will help you to defend against such claims.
#3. Workers compensation insurance:
Workers’ compensation insurance will help you to cover the cost to employees when they are unable to work anymore. May be due to some work-related injury that they have suffered. Even if your business has a low-risk work, a slip and fall injury could result in a pricy claim. So this type of insurance is a must for a business owner. If the workers’ family decides to sue you Workers’ compensation insurance will also help you to bear the cost you spend on legal fees.
#4. Vehicle Insurance Policy:
If your business is using any vehicles then those vehicles should be fully insured. The reason behind getting your vehicle insured is that if it is involved in an accident then the insurance will cover for the damages. At least third-party insurance is necessary but first-party insurance will also cover your vehicle’s damages. If your employees are using their personal vehicles and it is involved in an accident then their own personal insurance will cover the damages.
#5. Business interruption insurance:
Due to some natural calamity if your business operation is forced to shut down for a significant period of time you will face income loss as your staff won’t be able to perform due to the shutdown. This type of insurance works only when the companies require a physical location to do their business works like manufacturing, office work, or call center. Where your staff needed to be present at the location to perform their works. So having this type of insurance in place, you can avoid major financial losses. Check with your insurer to find the right kind of plans suitable for your business.
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#6. Product liability insurance:
If you have a manufacturing business you should have Product liability insurance. Even if you take every possible action to make sure that your products are safe. There can be a possibility that one of your product causes damage to some customer. This may attract a lawsuit against your company. In such cases, product liability insurance works to protect your business product.
#7. Home-based businesses:
Entrepreneurs often start their small scale businesses from home. A homeowner’s insurance doesn’t cover home-based business. For that, you have to take commercial property insurance if you want your business to be insured. You can also ask the insurer for additional coverage to protect your equipment and tools from damage.
#8. Data Protection Insurance:
This type of insurance helps to protect you from the cost of cyber threats or attacks. Suppose you have a call center where you have collected people’s data for some other company. You face a cyber-attack where your collected data is stolen. Then your company’s reputation will be ruined due to the data breach. Data protection insurance comes to work in this type of situation. In this type of insurance, it also helps you to divert those kinds of the situation by giving you proper guidance to protect your data.
#9. Surety and Fidelity bonds:
A surety is a type of bond between three parties that helps to ensure a project gets completed and guarantees payment if they are not made. Fidelity is a bond that protects a business from financial loss due to employee theft or fraud. You have nothing to do with this fraud but you have to suffer the losses. So this type of insurance is also a must for a business because you cannot read your employees’ minds.
#10. Multinational insurance:
It is a type of insurance that covers you if your business is operating outside the U.S. Buying multinational insurance will be a great help if you are a manufacturing unit or a call center outside of the U.S. It creates a single point of contact for all your businesses.
#11. Employment practices liability:
Employee practices liability or EPL helps you to protect yourself if an employee sues you. Though you are not guilty defending it can be a costly affair. The employee can claim discrimination, harassment, or illegal termination. In that case, EPL will help you to cover the related costs.
Final Words
Business insurance can help you to protect yourself from the above-mentioned scenarios. But business insurance doesn’t cover you from natural disasters, floods, and other types of major natural events. It won’t cover you from intentional damages. A standard insurance policy will not cover everything but if you add coverage riders to the standard policy it will help you to cover additional losses.
Also read: What Does Life Insurance Not Cover? [Ultimate Guide]
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