Key forms of business insurance
Before launching a small business, entrepreneurs should always take into account the financial risks that precede sales. Illegal practices, natural disasters or staff accidents at the workplace can break up small businesses before they have a chance to take off.
Fortunately, a wide range of business insurance options exist to help protect your investments by reducing these financial risks.
If you are confused about the best insurance options for your business, experts advise you start by choosing your professional insurance policy.
On the other hand, a number of entrepreneurs choose to buy insurance for their business online. Experts advise small businesses to move away from this step. At the onset of a project, entrepreneurs need support from insurance agencies to help assess the most appropriate insurance policies for their business. Communicating with several insurance agencies would help entrepreneurs explore different options.
Although there are different and diverse business projects, there are some common forms of insurance that small business owners should particularly look at, along with other types of insurance that both small and large businesses may require.
Types of insurance for small businesses
Property insurance covers damage and loss to the building that houses your business, furniture and computers among other assets as well as damage to important documents, resulting from a variety of causes, including natural disasters and theft. The coverage may also extend to stock, tools and production machinery. An insurance policy can cover all risks or specific risks if your business falls within a region with a high exposure to a particular type of disaster such as floods or earthquakes.
Insurance against business interruption
This type of insurance protects the profits of a company in the event of a natural disaster or any other accident that results in the temporary closure of your business. This insurance policy compensates business owners for loss of financial income during the closure period.
Home-based entrepreneurs should pay close attention to their insurance policy and refrain from assuming that their home insurance covers business losses. So, they should check their insurance policy carefully to determine which losses are covered.
Commercial vehicles insurance
This insurance protects all company vehicles, including vehicles that transport employees, products or equipment, against any damages or accidents.
This insurance can also cover non-company owned vehicles such as rented cars or employee cars, if they are used to carry out business activities.
Small business owners can purchase three types of liability insurance to protect their investments in the event of legal action against them. These include:
General liability insurance
All businesses, even home-based businesses, need this kind of insurance, which covers injuries, property damage, medical expenses and litigation costs.
Product liability insurance
This insurance protects against legal claims of personal injury or property damage caused by products sold or supplied through your business.
Professional liability insurance
A professional liability insurance protects entrepreneurs who provide services to consumers in the event of errors resulting from negligence or misconduct in the provision of professional services. This type of insurance applies to all professional companies, including law firms, accounting firms, consulting firms, real estate agencies, insurance agencies, barbershops, and IT companies, etc.
Workers’ compensation insurance
This form of insurance protects employees injured in the course of employment, providing wage replacement and medical benefits in exchange for waiving the employee’s right to sue their employer for negligence.
It is therefore very important that business owners purchase this form of insurance because it protects them and their companies against legal action.
Laws vary from country to country, but all companies are required to provide worker compensation insurance; penalties for non-compliance with laws can be hefty.
Health Insurance (Medical)
This insurance covers the costs of general diseases and accidents, medicines, doctor diagnosis, surgical operations, medical and therapeutic services and supplies, and medical programs.
Data breach insurance
If the company stores confidential and non-public information about employees or customers, on computers, servers or in the form of paper files, the company shall be responsible for protecting such information. In the event of a physical or online breach, this type of insurance can provide the necessary protection against losses.
This insurance covers the person in the event of death, where the insurer pays the beneficiary a sum of money. This is in exchange for a premium which the beneficiary pays to the insurance company throughout his life. Experts advise businesses to provide life insurance to employees because they will rest assured that their loved ones will not suffer any financial hardship if they die.
Home business insurance
This form of insurance is important for those who want to run their business from home. It protects against damages to the home and assets within. In addition, this insurance protects the owners against home accidents.