Business insurance is an essential utility for companies of all sizes, even fledgeling ones. It is an important step in protecting employees, customers, and your business investment. While the law requires some basic types of coverage, additional insurance is likely necessary, especially if you have associates and investors.
The type and level of coverage you need will depend on the industry and state in which your business operates. But, here are some of the primary insurance coverages you will need to consider for your new business:
General Liability Insurance
Every business should have general liability insurance. This type of policy provides coverage if your products, services, or employees cause damage or injury to a third party. It will also help with non-physical acts such as libel or slander.
Depending on the nature of your business, you may also benefit from additional types of liability insurance, such as errors and omissions liability or umbrella liability.
Business Owners Policy
Pretty much all the essential coverage is packaged into a business owner’s insurance policy (BOP). These policies often include business interruption insurance, liability insurance, property insurance, crime insurance, and vehicle coverage. What’s more, you can gain significant savings by taking this insurance package rather than piece together coverage from individual policies.
The downside of BOP, however, is that is is not available to all types of businesses. If your operation is in what is deemed a “high risk” industry, such as construction, you may have difficulty finding an insurer willing to offer you a BOP insurance package. It is not impossible, though.
Commercial Auto Insurance
If your new company operates vehicles of any kind, you will need to get commercial auto insurance. This type of insurance covers your commercial trucks, vans, SUVs, and cars from collision and other forms of damage. If your employees drive their own vehicles, as opposed to using company owned vehicles, you might consider non-liability auto insurance. That will help in cases where the employee has inadequate or no insurance.
Workers Compensation Insurance
Workers’ compensation insurance is a requirement for companies in most states. It helps to protect employees against sudden hardship that may occur as a result of an incident at work. The insurance covers medical care and replaces wages for those injured on the job. The payout is on condition that the employee agrees not to sue the employer, so having this insurance could help to reduce liability claims and costs.
Aside from the obvious benefits of having workers compensation insurance, there is also the incentive of avoiding potentially stiff penalties that the state hands out for non-compliance.
As mentioned earlier, the type and amount of insurance coverage required will depend on the industry in which you operate. It will also vary based on the number of employees you have, vehicles you operate, and in which state you conduct business. One thing is for sure, though: Your new business will benefit from a proper level of insurance coverage.
Businesses of all types need insurance, but even more so if you are in a high-risk industry. You will, however, find that things get a little more complex at this level.