Businesses face significant risks from their day of inception. These risks do not arise when the business hires its first employee as a law suit can deem catastrophic to a business even before it opens its doors to clients. In such a case, it is not only vital to have insurance, but the right type of insurance.
Luckily, there are a myriad of insurance plans for small businesses to shield them from these risks. Below are six types of insurance for small business owners.
1. Property Insurance
Most, if not all, businesses own or sometimes lease its premises, office equipment, inventory among other property. It is crucial for a business to seek the insurance protection of these property in the event of theft, vandalism or even fire.
It is, however, worth noting that property insurance may not cover everything that happens to the business’ property. For example, natural calamities such as earthquakes may not be covered by the general property insurance policies.
If your business is in such an area, it is key to consult with the insurer before purchasing the policy.
2. Life Insurance
A life insurance cover assures you against death. When you get this cover, your beneficiaries will receive a particular sum upon your demise. In exchange, you will pay some premiums till the maturation of the life insurance cover. With this life insurance cover, you can rest assured that your beneficiaries will not be financially burdened when you pass on.
You can always inquire and get your life insurance options explained by a credible insurance agency.
3. Workers’ Compensation Insurance
A great insurance policy for business that has employed workers. Although you can spend a significant sum on protecting employees, you can never fully know when an accident may happen at work. This cover protects the employees in the business from medical benefits and replacement of wages but the staff member losses their right to seek legal redress for the incident.
As a business owner, worker’s compensation insurance is an important cover that will protect you and your company from legal obligations.
4. Professional Liability
No one is perfect, and businesses are no exception either. Sometimes unforeseen errors or mistakes may occur leading to an adverse consequence on the client. This cover is applicable to any professional firms such as consultants, insurance agents, lawyers, real estate agents and accountants among others.
With this professional liability cover, your business is protected against the legal issues that may arise during the day to day operation of the business.
5. General Liability
This cover is useful in protecting businesses against injuries and accidents that occur during the regular operation of the business. It mostly covers bodily harm, damage to property or any injuries caused to third parties by your product/service.
If a third party sues your business, the general liability policy will cover the costs involved in solving the suit. Otherwise without insurance, you would be bound to sell your business.
6. Product Liability Insurance
Do you manufacture any products consumed by the general market? If so, you should definitely get a product liability cover.
Regardless of the steps you may take to ensure that your products are safe for consumption, you can still find your business entangled in a lawsuit due to one of your products. Having a product liability cover will protect the business from the liabilities they might incur from a product liability suit. A product liability cover should, however, be tailored according to the specific product offered by a company.
A business that is sufficiently covered by these insurance plans will avoid a significant financial loss that may arise from a lawsuit or a natural disaster. It is also important to select the right insurance cover depending on the services that the company offers and their interactions with clients. Business owners who are cautious enough to take extra measures of protecting the business will likely thrive during difficult business or economic cycles.
Understanding your needs as a business and selecting the most appropriate insurance policy is certainly the best way to evade risk.