Business owners all most commonly aware of the need of professional liability insurance also known as E & O or errors and omissions insurance, but what about other coverage? There are many types of insurance that businesses have access to that can protect the business and owner(s) from a catastrophic event or even a lawsuit.
Here are many types of insurance businesses need to consider to be best protected. This is not by any means an exhaustive list. Some of the most important types of coverage are listed below. Please consult a good insurance agent for others not listed below and to find what is best for your business.
Professional liability insurance protects businesses against negligence claims due to harm or injury that can occur from mistakes, accidents or failure to protect clients from harm. Each policy is specific for your industry. Each industry has its own set of standards or concerns that need be addressed in a specifically designed policy written for that business.
If your business owns, leases its building, office, or land property insurance is a must have. This insurance will cover equipment, sign, inventory, fixtures & furniture in the event of an unplanned situation such as fire, storm or theft. Businesses need to note that mass-destruction events like floods, hurricanes, tornadoes and earthquakes are generally not covered under a standard property insurance policy. If you are in an area that has experienced or could experience a natural disaster you need to check with your insurer to price a separate policy for that coverage.
A successful entrepreneur will not work alone forever. As soon as your first employee has been brought on you will need to add workers’ compensation insurance to your business’s insurance policy. This coverage will include medical treatment, disability & death benefits for your employee in the case they are injured or dies resulting from work with or at business. This coverage needs to be in place no matter how simple the tasks are required in their position.
Small businesses seem to be starting everywhere and many begin in founders own home. Your homeowner’s policy will not cover home-based business to the extent that a commercial property insurance policy will. If you are considering opening or operating a business out of your home, you need to consult your insurer for the additional insurance coverage to include your equipment, and if necessary, your inventory in the event of a claim.
If you are in the business of manufacturing products for sale, whether wholesale or retail, product liability insurance is a must have! A business can never rest assured that they have taken every measure possible to make sure their products are safe. There is always the possibility that a company can find itself named in a lawsuit due to damages caused by one of its products. Product liability insurance is put in place to protect businesses with coverage tailored specifically to specific products.
Do you have company vehicles? These vehicles should be fully insured to protect businesses against liability if an accident occurs. At a minimum, businesses should insure against third-party injury (third-party liability may arise when an individual or entity that is separate from the employer causes the workplace accident), but comprehensive insurance will cover that vehicle in an accident, as well. If employees are using their own cars for business, their own personal insurance will cover them in the event of an accident but not if they are delivering goods or services for a fee. This includes your delivery personnel.
If a disaster or catastrophic event occurs, a business’s operations will likely be interrupted (a recent example would be damage from Hurricane Michael where entire neighborhoods and towns were left damage and disrupted). In this situation a business will suffer from lost income due to staff’s inability to commute and or work in the office, manufacture products or make sales calls. Damage to power lines, phone lines, water lines and roads will take time to be repaired and can leave your business with no way to function. Interruption insurance is especially applicable to companies that require a physical location to do business, such as retail stores and restaurants. Business interruption insurance will compensate businesses for lost income resulting from these catastrophic events.
It is crucial that you purchase both for you company and your personal home umbrella coverage that is excess beyond any liability coverage that you have. This insurance is relatively inexpensive for the very good protection and peace of mind it can provide.
Ensuring that you have the right insurance in place, your business can avoid a major financial loss due to a lawsuit or catastrophic event.