The Different Types of Business Insurance Explained
In the United States alone, there are 30,748,033 businesses. Out of those, 99% of businesses are small.
If you’re a small business, then you might wonder about the different types of business insurance out there. While choosing the right business insurance for your needs might seem tough, there are tips out there for you.
This article will explore various types of business insurance and help you find the right plan(s) for your needs.
Business Owner Policies
When you’re first starting out, many businesses begin with a Business Owner’s Policy. It combines 3 coverages which are business income insurance, general liability insurance, and commercial property insurance.
1. Professional Liability Insurance
Another name for professional liability insurance is errors and omissions insurance. It covers you against negligence claims from mistakes, or the failure to perform. Keep in mind that each industry will have its own amount, and there’s not a one-size-fits-all package.
2. Workers’ Compensation Insurance
One of the most common work injuries is overextension. Your business insurance price can include workers’ compensation insurance.
Whether you have 1 or multiple employees, this is good to have for coverage. It’ll cover death benefits, disability, and medical treatment.
This is for in the event of a worker dying or suffering an injury at work. Even if it’s carpal tunnel syndrome, medical conditions can add up fast.
3. Product Liability Insurance
Large and small business insurance can include product liability insurance for your products or goods that you sell. Even if your business takes all safety measures necessary, you can suffer a lawsuit for damages from one of your products. You can find coverage that’s specific to your needs.
4. Vehicle Insurance
If you have company vehicles, you’ll want vehicle insurance. This will protect you against liability from an accident.
You need to protect yourself against 3rd party injury at the least. Comprehensive insurance is your best option in the case of your car being in an accident.
If you have your employees using their own vehicles, then it’ll go onto their personal insurance. This doesn’t include delivering services or goods for a fee.
5. General Liability Insurance
This is one of the most common types of business insurance. This is if your employee or business injures a third-party person. It’ll protect your business against lawsuits.
Third-party can include vendors, customers, landlords, or other employees that aren’t part of your business. Not only does it cover physical injuries, but non-physical injuries as well. This can include slander, libel, false advertising, etc.
If you face damages, this policy will cover you up to the policy limit. It’ll also cover attorney fees that are related to defending your business.
6. Business Income Insurance
Business interruption insurance, also known as business income insurance, is additional coverage to your property insurance. If a loss makes your business stop running, this insurance will compensate your business for lost income during this time.
It’ll allow you to pay your fixed expenses such as salary and rent to your employees and business. You can take care of any financial obligations while recovering from loss.
7. Commercial Umbrella Insurance
This gives your business added protection from accidents and large lawsuits. It starts when your auto liability, general liability, or other coverage aren’t enough for damages incurred.
It’s a cost-effective add-on option for coverage. If you’re a company with many high-risk exposures or substantial assets, then it might be right for you. Also, it can be for you if you have a high net worth of businesses or clients that involve driving.
8. Key Employee Insurance
This is what protects you against the death of a key employee. It’s a life insurance policy that’s paid for and owned by the business.
Your business will be compensated if the key employee dies. This will provide your business with the funds necessary for the business to continue operations, and find a replacement. Keep in mind that it’s not a business deduction by the IRS.
9. Cyber Insurance
This protects you from data loss, malware, and cyber-attacks. If your business has internet, then you’ll want this insurance. Take a look at what the policy will cover as far as digital payments and credit card processing.
If you don’t have this type of insurance, then you might face legal trouble as well. This is because the personal information or data of different people can be released.
10. Unemployment Insurance
Unemployment insurance is vital if you’re looking to take care of your employees and it attracts employees since it’s supplemental coverage.
11. Property Insurance
This is vital for protecting your business whether it’s in an office or home environment. It’ll protect your different equipment and office furniture.
You can look for property insurance that’ll protect signs on your property as well. This is a necessary coverage you’ll want to have for your business.
12. Equipment Breakdown Coverage
This is for damaged or malfunctioning equipment. It’ll help with costs of the breakdown of spoiled inventory, loss to business income, etc.
Exploring the Different Types of Business Insurance
Now that you’ve explored the different types of business insurance, you should have a better idea of what business insurance might be best for your business.
Are you ready to find the right business insurance for your needs? Contact us today and we’ll come up with an action plan that best suits the needs of your business!