The aim of establishing a business is to make profits. The moment a business is founded, it is exposed to risks in the market world. Even before hiring the first worker, you should ensure that your business has the right insurance cover. Any business is at risk of getting crushed even before getting off the ground due to factors such as a lawsuit.
The good news for entrepreneurs is that they can now access a variety of insurance companies to protect their business from such catastrophic events. Before buying insurance cover for your enterprise, be sure to acquire quotes from several insurances.
The good news is that you can get small business insurance quotes online, which you can analyze in detail before deciding on the type of insurance coverage you’ll need for your business. In this article, we’ll discuss insurance coverage you might want to consider for your business.
1. Professional Liability Insurance
This type of insurance is also referred to as error and omissions insurance. In business, some employees may not perform as expected. This insurance covers you against lawsuits that stem from negligence of duty that results from the blunder of an employee or caused by performance failure. It helps a business to avoid a notable mistake, which may harm a customer or client.
For instance, when a company makes an error that may lead to a client to incur losses, they may be sued, and these repercussions are highly costly. The insurance my cover by paying the fees involved in solving the conflict.
2. Property Insurance
This insurance cover applies whether a business leases or owns its space. It protects inventory, equipment, furniture against fire or theft, and signage. Under a standard property cover, major catastrophic events like tsunamis are not covered.
If your business is located in an area prone to such kinds of catastrophes, it is crucial to revisit the policy with the insurance company to ensure you are covered. Types of coverage provided are extended replacement costs, replacement costs, and actual cash compensation.
3. Workers’ Compensation Insurance
Once you’ve hired the first employee in your company, you’ll need to include the workers’ compensation insurance to your business coverage policy. This policy will cover medical expenses or death benefits if a person dies due to work-related complications. Every employee should be covered even though they might be working in areas of low risks.
4. Product Liability Insurance
This type of insurance cover is a must for enterprises which are involved in manufacturing products to be sold in the general market. Although a business takes all measures to ensure that all its products are safe for consumer markets, damage caused by even one of its products may lead to a lawsuit against the company. The insurance will cater for benefits compensation if the product actually injures a person.
For instance, if you are involved in toy manufacturing and one of your toys hurts a child, you will be liable, and the law requires you to compensate for that. In some cases, you may be sued even before you have actually started the manufacturing process. This happens when the product you are about to manufacture has a negative impact on the environment or social life.
5. Vehicle Insurance
Most businesses have vehicles involved in transportation such as ferrying raw materials or finished products to the market. These vehicles should be covered to avoid losses in case of an accident. The package cover may also protect the car against theft, damages caused to the vehicle by a traffic event, or even weather-related disasters.
Many state laws require you to first insure the vehicle before using it on public roads. The liabilities to be covered will determine the price of that particular insurance cover. Types of auto insurance include liability coverage, collision coverage, and comprehensive insurance and medical payment coverage. If an employee is ferrying goods for the company and an accident occurs during the transits, the company will be liable and are eligible to cater for the expenses.
6. Business Interruption Insurance
When you start a business, you should be aware that some events like earthquakes may lead to temporary stoppage in business operations. During this period, your business will incur losses as no production activities will be taking place. The insurance cover will cater for your loss during this time.
This type of insurance is necessary for enterprises that have a physical location for business activities such as a store. You should revisit the policy with your insurer to ensure that you have the right coverage to avoid significant loss in case of a catastrophe or a lawsuit.