Many small business people are confused about the maze of business insurance products out there. You want to be responsible about the risks you face in your business, but you are busy running your business! It is really not too complicated, though. Let us walk you through the various forms of insurance that most small business people need to consider with our overview of business insurance.
General Liability Insurance
This form of insurance is perhaps the most basic and is conceptually easy to understand. If you or your employees are alleged to have caused personal or property damage to others, whether customers, vendors, employees or even competitors, general liability insurance will provide both legal defense and coverage if you are found liable for the damages.
If you own the premises where your business is located, then you need property insurance. If you are a tenant, then you need commercial renters insurance. These forms of insurance will cover your office equipment, inventory, and other business property against casualty loss due to fire, theft, vandalism and other causes. You will also want to discuss with your insurance broker whether you need business interruption insurance to cover your loss of earnings after a casualty when your business is unable to operate.
Commercial Auto Insurance
In many cases, it makes sense to carry insurance specific to the vehicles employed in your business. These products typically cover both collision and comprehensive (damage to your vehicles) and property damage (damage to other people’s vehicles). Personal injury to your employees can also be covered, as well as any damage to your business property, like equipment and inventory. You will also want to consider insurance to cover liability for your employees when they are driving their personal vehicles. If they are deemed to be acting in the “scope and course of employment” when they have an accident, you can be held liable.
Workers’ Compensation Insurance
Workers’ compensation is an issue of state law and the specifics vary from state to state. The workers’ compensation system in all states basically involves a “trade-off” between the employee’s right to sue you if he or she is injured on the job, and your obligation to carry insurance that covers him or her. As a business owner, it is very important for you to carry this kind of coverage in order to protect you from liability. In addition, penalties for not carrying workers’ compensation insurance in most states are severe. These policies typically cover medical costs and lost wages for employees who are injured on the job.
Professional Liability Insurance
Also known as errors and omissions insurance, this type of policy will protect you if you are in the business of providing professional services like legal, notarial, real estate and others, and you face claims of negligence in your provision of those services. Professional liability is not typically covered in general liability policies so if there is any chance you could face these kinds of claims, you will want to discuss this kind of policy with your insurance broker.
Business Owner’s Policy
It is sometimes possible to assemble a complete portfolio of the various insurance products required by a business into one overall policy. General liability, property, vehicle and other insurance can be rolled into one policy in a BOP and often you can save money by purchasing separate policies for everything. With this type of policy, you will want to be very sure you do not face any gaps in coverage, so it will be important to consult with your insurance broker.
These are the most common types of business insurance. Every business faces slightly different risk-management challenges and you will want to make sure your portfolio of coverage is carefully adapted to your unique needs. Come see us today for a consultation about your business and the coverage that you need, or fill out our form to receive a free business insurance quote.
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