Running a business is no easy task. You have to think about all aspects of your company, from supply chain management to marketing and customer relations. Another important consideration? Insurance. Whether you’re just starting out or have been in business for decades, it’s important to make sure you’re adequately insured. When you run a business, there are many forms of possible liability that can arise if something goes wrong; let’s take a look at some of the most common:
Property insurance is the protection you need to cover your building and everything in it from damage or loss. It’s usually a part of general liability insurance, which also covers things such as equipment and inventory.
Property insurance covers fire, theft and vandalism damage to buildings, as well as any other part of your business property like:
- Landscaping or trees on your property
- Fences around your building or property
- Vehicles that are owned by the company (not leased)
Liability insurance protects against claims of negligence. If a customer slips and falls in your store, they may sue you for damages. Liability insurance covers the cost of defending those lawsuits and also covers the cost of paying any damages awarded to the plaintiff if you are found liable for the accident.
It’s important to have liability insurance because it can be very expensive to defend yourself in court and pay out-of-pocket if someone sues you over something that happened on your watch or as part of your business operations. In addition, if you have employees, it’s important that they also have personal umbrella liability coverage so that they are covered for their own negligence when working on behalf of your company (i.e., driving an employee car).
Commercial auto insurance
The second most important type of insurance to have is commercial auto. This coverage is required in most states and provides liability protection for your vehicles. The main difference between personal auto and commercial is that personal policies don’t cover business use of a vehicle, whereas commercial policies do (so if you use your car during the day for work, then it’s covered).
Commercial auto coverage also includes leased vehicles, which can be risky without proper insurance. It may seem like an unnecessary expense to pay for insurance on something that you’re only renting out temporarily—but this policy will protect both yourself and the rental company from financial liability in case of accident or injury.
Finally, contractors who occasionally drive company-owned cars are also covered under this policy; whether they’re driving for work purposes or personal ones doesn’t matter as long as they’re on the clock doing business activities when they’re behind the wheel.
Business interruption insurance
Business interruption insurance is a type of insurance that helps you recover from losses caused by a covered event, such as a fire or hurricane. In the event that your business is forced to close due to this type of covered event, business interruption insurance can help you continue operations by providing funds to hire replacement employees and pay for other expenses associated with keeping your business running.
In addition to covering the cost of hiring new employees and paying them while yours are unavailable, business interruption coverage can also compensate you for lost profits during this time. This coverage will be paid out over time as long as your business remains closed; if it reopens within 90 days after being shut down, then you’ll receive an advance payment on the policy—similarly, if it stays closed longer than 90 days but less than six months (or one year), then an advance payment will be made upon resuming operations.
If you’re unsure about whether or not this type of coverage would benefit your company’s finances—and don’t feel like reading through all those boring details—the best course of action is simply contacting one of our agents at Risk Management Solutions: we’re here 24/7/365!
Workers’ compensation insurance
Workers’ compensation insurance is mandatory in all states so that injured employees can receive medical treatment and be compensated for lost wages. Workers’ compensation insurance covers only “job-related injuries or illness,” which means you won’t get coverage if your employee gets hurt at home or on a vacation.
Some states require employers to carry workers’ compensation insurance, while others mandate that only those with a certain number of employees must do so. If your state doesn’t require it and you don’t carry it yourself, an injured employee could sue you instead of receiving payments from their own insurer.
Professional liability insurance (errors & omissions)
Professional liability insurance, also called errors and omissions (E&O) insurance, covers you if someone sues you for damages caused by your work.
- What is professional liability insurance? Professional liability insurance covers legal expenses and settlements from claims made against you due to negligence or errors in your work. For example, if a client files a lawsuit against your company for damages because of an error in the design of their building (for example), this type of policy would pay for any legal fees associated with defending yourself against that claim.
- Why do I need it? Because mistakes happen: making sure that they don’t cost you money is important! Also, having professional liability coverage means that if there’s ever a problem with something related to your business—even if it wasn’t directly related to something you did wrong—the insurer will step up and help out until everything’s back on track again.
- How does it work? E&O policies can vary widely by provider and coverage type (there are many different types!), but generally speaking they include two main components: defense costs associated with defending yourself against lawsuits brought by other people; and indemnification costs associated with settlements between yourself/your business/your employees (i.e., paying off what others owe). The actual amount varies depending on how much risk there is from potential litigation over time—some businesses may not see any lawsuits at all during their lifetimes; others might have several per year! That said, even small businesses tend to pay about $1 million per year for these coverages when purchasing them through large insurers like State Farm or Allstate Insurance Companies USA Inc… so start saving now if it sounds important enough!
Cyber liability insurance
Cyber liability insurance is a type of commercial insurance that protects businesses from cyber attacks. It can cover losses from data breaches, identity theft and other cyber crimes.
If your business has sensitive data—such as trade secrets or customer information—it’s a good idea to have this coverage in place. If you don’t have it, but suffer a loss due to a cyber attack, it may be difficult for you to recover the money spent on damage assessment and mitigation efforts.
When you run a business, there are many forms of possible liability. Be sure you have the right coverage.
When you run a business, there are many forms of possible liability. In order to be sure your business is protected, it’s important to consider which types of insurance are most important for your organization.
The first type of coverage most small businesses (and even large ones) need is workers’ compensation insurance. This protects your employees from injury or illness on the job and helps cover them if they become injured as a result of their work duties. It also covers lost wages if an employee has to miss work for any reason related or unrelated to his or her injury at work—including maternity leave and sick leave for other illnesses or injuries that are not work-related.
Another form of liability coverage that’s vital for businesses big and small is general liability insurance (GLI). GLI covers costs related to claims brought against you by customers who have been harmed in some way by something related to your business—injuries sustained while using one of your products, property damage caused by one of your products/services, medical bills incurred as a result of being injured on site while visiting the location where goods were purchased/services were rendered…the list goes on! This can include anything from faulty product recalls affecting millions nationwide due with no warning whatsoever; slip-and-fall accidents involving cracked sidewalks outside local retailers selling items made overseas without any notice whatsoever; even situations where someone slips under water coming out off an improperly maintained boat ramp into lake water polluted due with no warning whatsoever…the possibilities really don’t end here!
If you’re running a small business, it can be tempting to skimp on insurance. But this is a mistake! Protect yourself by making sure that you have the right coverage and enough of it.