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A Guide to the Types of Business Insurance

by Olufisayo

Did you know that the moment you start a business, you expose yourself to a wide array of risks? Even before you start hiring employees, your business will still be at risk, some of which need insurance coverage. A catastrophic event, or even just one lawsuit, would be enough to wipe out your business before you take it off the ground.

Fortunately, there are many types of business insurance to cover and protect your business in case of these situations. In this post, we’ll look at some of the most crucial types of insurance you may need to get immediately.

General Liability Insurance

General liability insurance is hands down one of the most vital types of business insurance that every business needs. It protects your business when third parties. It’ll cover you if your clients, customers, or vendors sue you for injuries caused by your product or services.

It also covers you when a person is injured on your business property. Also from advertising injuries such as slander and misappropriation.

This coverage is even more important for businesses that are prone to accidents. Such businesses include manufacturing companies, construction businesses, and landscaping businesses. However, even in regular businesses, a customer could slip and fall and sue you, making it very important.

Commercial Property Insurance

Commercial property insurance is also an important insurance cover. It serves to protect your business inventory, office space, and business equipment. It’ll also cover other business properties against damages or losses.

This is more important for businesses with brick-and-mortar stores and it’s vital to insure your store. There are many incidences where this type of small business insurance will help include. Such as theft, vandalism, fire, or weather-related disasters.

Most commercial property insurance policies cover water damage. However, not all of them cover major natural disasters like tornadoes or earthquakes. You may need to get additional coverage to protect your business.

Professional Liability Insurance

It’s also known as errors and omissions insurance. Professional liability insurance is one of the most important types of small business insurance.

It’s best suited for professional service providers such as doctors and lawyers. If you offer professional services, this type of business insurance option will help if clients were to sue you for errors or omissions.

Worker’s Compensation Insurance

Workers’ compensation insurance is legally required by law if you have employees. Employees may, at some point, get injured in the line of duty, and your business will have to compensate them. This is one of those types of business insurance you shouldn’t take lightly as it could result in fines and maybe even criminal penalties.

If one of your employees is injured while working for you, the workers’ compensation will cover several things. These include medical expenses, lost wages, pain, and suffering, or permanent disabilities. If the employee sues your business, the workers’ comp policy will also pay to defend the lawsuit.

Unemployment Insurance

Just like workers’ compensation, unemployment insurance is required by the government. It covers the employees in case of termination or job loss. For this insurance, you’ll not go to an insurance carrier.

Instead, you’ll pay for it just like you pay for payroll taxes such as state unemployment taxes and federal unemployment taxes. The amount you pay will highly depend on how many employees you have, whether you are a new business and your employee turnover. When one of the employees is out of work, they’ll make an application and receive unemployment benefits.

Disability Insurance

This is another insurance policy required by the government. It provides a percentage of payments to employees who are unable to work due to injuries or illnesses. This is different from workers’ compensation in the sense that the injuries don’t have to be job-related.

For instance, if you have a pregnant employee, they could receive their disability insurance money once they give birth.

Cyber Insurance

Did you know that about 43% of cybersecurity attacks target small businesses? A cybersecurity attack could plunge your business into oblivion. You could lose client data, and the clients could sue you for data exposure.

Cyber insurance will protect you from third-party lawsuits that result from data breaches. It’ll also enable you to transfer any cost associated with the attack, such as first-party costs.

These include paying forensics to get to the bottom of things and understand why the breach happened. It’ll also cover credit monitoring services, notification of victims, and public relations in case of a fallout.

Commercial Auto Insurance

If you have an automobile for your business, you need to get commercial auto insurance for it. Using your personal car for business purposes is not recommended.

You may have a hard time getting it covered through your personal automobile insurance. This means if you have a commercial vehicle, you should get commercial insurance. You can ask for a Youi insurance quote if you want to know how much it will cost you.

Employment Practices Liability Insurance

As long as you have employees, you may want to consider getting employment practices liability insurance. It’ll protect you when your employees make certain claims. These claims could be wrongful termination, discrimination, sexual harassment, failure to promote, etc.

Key Person Insurance

Key person insurance is a policy that covers an employee that is crucial to the success of the business. This can be a top-level executive whose disability or death would be a setback for the company.

The key insurance policy will protect your business from the negative consequences of losing a key person. It’ll also take care of all the costs associated with replacing them.

Different Types of Business Insurance

Running a small business, or any business for that matter comes with various unknowns. It’s imperative for you to be prepared with the right business insurance to avoid losing a business. These are the different types of business insurance that you need.

You may not need all of them, but you should consider the most important one depending on your type of business. If you loved this post and found it informative, please check out our website for more.

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