6 Essential Business Insurance Coverages
From the first day a start-up business launches it is exposed to some types of risks. Even before hiring begins, the risks are already existing, and this makes it necessary to have the right business insurance in place. A single claim or catastrophic event could wipe out the working capital of a start-up before it gets off the ground. Thankfully, there is a broad range of business insurance policies to cover any business against claims and lawsuits. Here are some business insurance types that are essential for most companies.
Professional liability insurance.
This type of insurance coverage is also known as errors and omissions (E&O) insurance. It will cover a business against negligence claims resulting from mistakes or failure to perform certain duties.
As long as your business occupies a property (whether as an owner or a tenant), it needs to have property insurance. This will cover all signage, equipment, inventory and furniture in case of a storm, fire or theft. However, "Acts of God" like earthquakes and floods are usually not covered.
Workers’ Compensation Insurance.
Every business should have this insurance added to their policy before hiring begins. The policy will cover disability, medical treatment, and death benefits in case a work staff member is injured or dies as a result of working. Even employees who are not in high-risk jobs could experience injuries like slipping and falling which will inevitably come down to whether or not the business has workmen compensation.
Product liability insurance.
If you manufacture products for the wholesale or retail markets, you need a product liability insurance to protect your business in case of a claim. Even though you have stringent policies in place to make sure your products are safe, some companies will still find themselves in a lawsuit because of product quality or effects.
If you use vehicles for your day to day business activities, then you should have a comprehensive business motor insurance to protect the business against liability in case of an accident. All companies should have at least a third party insurance coverage. However, if your employees are using their own vehicles for your business activities, then they are covered by their own personal insurance.
Business interruption insurance.
Sometimes a catastrophe or disastrous event can slow down the operations of a company. A business interruption insurance can cover the loss of income suffered. This type of insurance is usually necessary for brick and mortar business models such as retail stores.