If you have just started a business, or are planning to, then you need to be thinking about insurance. It’s not the most exciting topic, but more than a few businesses through the years have been shuttered because they didn’t properly protect themselves, or they were not following the law. Insurance isn’t optional when you own a business. You need to make sure that not only yourself, but your clients, staff, and visitors are all protected in the case of something bad happening. Here is a quick guide to business insurance for new business owners.
How Important is Business Insurance, Really?
It’s very important. It’s true that some businesses are more risky than others when it comes to liability, but all businesses carry at least some risk. Unexpected things can happen. If you have no staff and work from home, you might not worry about someone tripping and falling on your property. However, you can still be sued for work-related things, such as failure to deliver services or reputational harm.
The point of insurance is to protect you from things that could severely damage your finances. You don’t know when something might happen, and in the worst case scenario, you could end up in closing your business and in financial ruin because you have to pay out awards and cover medical bills and other expenses.
General Liability Business Insurance
This is a very important insurance coverage that every business should have. It protects you from liability if someone gets injured on your property, or property is damaged, or you are proven negligent in some way. You might be very careful, but nobody is perfect. Since not all businesses are the same, you should get coverage that is specific to your industry. If you are running a catering business, then get catering business insurance to make sure that you are covered for anything that might commonly happen within that type of business. General liability insurance will cover medical expenses, lost wages, and legal costs, among other things.
Commercial Property Insurance
Commercial property insurance will protect you in the case that your property is damaged or destroyed. It can also protect you if you damage someone else’s property while doing your work. It will cover damages from most situations, such as fire, vandalism, weather events, and water damage. You can cover not just your building, but also signage, equipment, furniture, and anything else you use for your business. Some policies will also cover certain documents, so if you think that you need this coverage, check with your provider. If your property is damaged and you can’t continue doing business for the time being, then you will want this protection to provide you with compensation until you are back up and running.
Commercial Automobile Insurance
If you have vehicles that you or any employees use for your business, then you need to get commercial automobile insurance. Your personal auto insurance will most likely not cover vehicles for business use. THis coverage will provide compensation for medical bills, damages, and other expenses to anyone involved in a crash, including you or your employees.
There is a big misconception about home businesses and insurance. Many people think that if they work from home, their home policy will cover them for any losses if there is a fire, theft, or other unfortunate incident. However, this is not necessarily true. Your home policy probably does not cover you if you lose equipment like your computer, printer, or any files. It won’t cover you for any inventory that you have stored there, either. You can either take out a separate policy, or add a rider onto your home policy to make sure you are covered. If you don’t tell the insurance company or try to hide it from them, you could get caught, which could lead to a cancellation of coverage.
In the vast majority of states you must have workers’ compensation coverage if you have staff. In fact, there are a small number of states that require it even if you don’t have any staff at all. The reason is that your employees should not be left without income if they get hurt or sick while working for you. Workers’ compensation will make sure that they are provided benefits for lost wages, as well as for medical bills and other expenses related to their situation. Besides being the law, it protects everyone, from your business to your employees, if someone gets hurt.
As you can see, insurance for small businesses is a bit more involved than you might have thought. The key is to get coverage that will protect you for anything that might be a risk. Every business is different, so make sure that your insurance is geared for your business. That way you can rest your head at night knowing that you are protected.