The Seven Types of Business Insurance That You Need

Starting a business is exciting, but it can be a bit risky. Now that you have taken the leap and started something new, you are working hard and you know you need a good night’s sleep. You have to be ready for whatever comes. So, if you don’t want to stay awake worrying about which of these risks might get you, then you should make sure you are properly prepared with the correct insurance.

Here are seven types of insurance that you must have for your business. You should also have an excellent insurance broker to help you understand exactly how these apply to your situation and your business. Insurance is not one-type-fits-all, so be sure to discuss your particular business with an insurance broker.

Professional Liability Insurance

This insurance is necessary if your business employs people who perform a professional service, such as trainers, or massage therapists. The business needs to be covered against negligence claims or damages that happen because of mistakes.

Product Liability Insurance

If your company is making, or selling something for the general market, then something could go wrong with the product. Even the business that takes every precaution and ensures safety can still find itself named in a lawsuit.

Property insurance

Insure the business against fire, storms, theft, and against natural disasters like floods and earthquakes if you think they might happen in your area. In the event of a catastrophe, you will want to be able to replace or repair the building, the furniture, and the equipment that was lost.

Home-based business insurance

If your business is in your home, then you have a lot of different things to consider. First of all, don’t assume that you don’t need extra insurance. Your homeowners policy will not cover business losses. It goes both ways. Will your home be covered if there is a fire caused by something associated with the business? Check with your insurance broker.

Vehicle insurance

Company vehicles should be fully insured in case of an accident. If you are using your own vehicle as part of your home based business, then the insurance company should be aware of that use for the vehicle. The business vehicle policy may not have a specific mention of vehicle use, so that is another thing that must be checked with your broker.

Workers compensation insurance

If you have employees, you should have worker’s compensation on the policy, to cover anything happening to an employee if they are hurt, injured or killed as a result of the work with the business. Even if it is low-risk work, it is still necessary.

Business interruption insurance

If there is a disaster or something happens that interrupts the business’s work, then the business will suffer from lost income. This insurance can help compensate for the lost time and income.

Once the proper insurances are in place and completely understood, you will sleep better at night. Make sure your unique situations are considered, and don’t fail to have these basics in place.

Understanding the Need of Having Adequate Business Insurance Cover

Insurance is a means to protect the businesses from unforeseen risks; it provides peace of mind to the business owners. However, choosing adequate insurance cover is crucial to leverage the benefits it offers. This article sheds light on the negative impact of under or over insuring a business and the importance of having adequate insurance cover.

Under-insurance or over-insurance – impact
Besides determining various risks that your business is likely to face, you also need to calculate the amount required to cover the risk to determine adequate cover, failing which you may face the following issues –

• Revenue loss: Under-insurance may cost you dearly. The low premium may initially attract you, but it may lead to revenue losses when the risk arises. If any risk arises and your business is not covered with adequate insurance, it may affect your business financially, as you have paid for an insurance cover that is less than its value and you have to bear with the loss of revenue.

• Business interruption: Being under-insured may lead to business interruption, because, if your business is not covered with adequate insurance, you have to endure losses in case of physical property damage or liability claims. Until you spend some money from your pocket to re-build the business, you may not be able to run your business. Business interruption, thus, halts the revenue you are generating.

• High premium rates: Over-insurance results in paying high premium costs, for a coverage that goes beyond the actual cash value of the risk that was insured by the policy holder. If your business is over-insured, and you are paying high premium, which is actually not required, you will be in a loss.

Adequate insurance and its importance: Incidents such as accidents, natural calamities like storms, etc. can result in interruption/closure of your business. Having adequate insurance coverage is, therefore, very critical to protect your business from such kind of risk. Following are two more benefits of having adequate insurance –

• Smooth business operation: If your business is insured with adequate insurance coverage, you can operate your business smoothly. You need not worrying about the risks that may occur in your premises.

• Resume operations after unexpected events: After an unexpected event at your business premises, you need to rebuild your business to resume operations. At this critical time, having business insurance is very helpful; it will cover the loss incurred. It helps rebuild your business and resume operations.

Determining the insurance cover for your business
Before you purchase insurance for your business, it is important to calculate the total value of assets and costs required to repair/replace them when an unforeseen event happens. For this, take help of tools such as property value calculator, replacement cost estimator, etc. which enable you to determine the coverage required for your business. This way, you can avoid the instances of both under and over insurance.

Take expert advice
After knowing the importance of having adequate insurance for your business, purchasing it on your own can prove risky, as you may miss on a few things. Therefore, it is better to take advice of insurance brokers as they will help you in choosing adequate insurance coverage after looking at all the aspects of the business.

Your business may be thriving well; however it might face difficulties which you cannot foresee. Purchasing insurance that covers all the potential risks to your business adequately is, therefore, a sensible business idea.

Protect Your Assets With the Right Business Insurance Coverage

A single spark can set a store on fire. A simple slip can lead to a long and expensive law suit. You can wake up the next day and your corporate car is not on its parking slot. If there’s one thing every business owner knows, it’s the fact that there’s nothing certain and it’s important to reduce risk to the very minimum.

Many business owners fall into the trap of not getting the appropriate business insurance coverage. Let’s dissect that statement further. It is not enough to ensure your business. Commercial business insurance should be your failsafe. Meaning, your business cover should be something that encompasses all possible scenarios.

Identifying All the Risks Associated with Your Business

The first step in determining the right business insurance for your enterprise is conducting a thorough audit of your entire business operations from start to finish. Make sure that no stone is left unturned. If you’re the owner, there’s a high probability that you may not be aware of everything that is happening in your daily business operations, so it is best to bring in all your managers as well as the key employees to ensure that you don’t miss anything.

Knowing the Different Types of Business Insurance

There are four major broad types of commercial business insurance.

The first category is probably the most common – business property insurance. Simply put, this type of insurance will give you monetary reimbursements, if your business properties (i.e. Your office, your machineries, etc.) were damaged or destroyed.

The second general classification of business insurance is liability insurance. If you injured a person or damaged a property during the conduct of your business, this type of insurance will take care of that. For example, if you’re a restaurant owner, and someone slipped within your restaurant because of a spilled drink, you can use your liability insurance to cover for the victim’s hospitalisation expense.

Third is the automobile insurance which is basically similar to your personal car insurance. It will cover the damages inflicted on your company-owned vehicles including those resulting from collision accidents.

Lastly, the umbrella commercial business insurance does not play a specific role. Rather, it extends the limits of your other insurance policies. It may also be used to cover other things beyond those which are covered by your liability, property and automobile insurance policies

Sufficiently Investing Towards Your Insurance Policies

By identifying all the areas in your operations that may cause financial losses to your company, you will be able to identify which types of insurance you need. Aside from selecting an insurance category, you likewise need to ensure that you are investing enough towards these business insurance policies.

For example, if you run a hotel business with several luxury cars to transport your guests, you should invest heavily on automobile insurance and the policy you should get should have a high premium. You can’t have a $30,000 BMW luxury sedan and just have $5,000 worth of automobile insurance.

At the end of the day, having the right business insurance coverage is your safety net if and when the worst case scenario turns into a reality.