5 Types Of Insurance Every Small Business Should Have
Business
Running a business comes with a huge range of benefits, but also liabilities. Insurance can help you to protect your business and your personal finances from lawsuits, but which type of insurance is right for you? Here is a quick guide to the five main types of business insurance and how they are used.
Worker’s Compensation Insurance
This type of insurance is sometimes simply called workman’s comp or worker’s comp insurance. It can help employees if they become injured or become ill from doing their job. Most states and municipalities require businesses to have worker’s comp insurance before they can employ people. Plus, the last thing you want is to be unprotected if an employee hires a workers’ comp lawyer. So you need to be prepared and insured.
Take a look at The Hartford for workers comp insurance at affordable rates. Their packages benefit you, the small business owner, as well as your employees. Lawsuits from injured or ill employees and their families can be expensive but workers comp insurance helps cover the costs.
For businesses operating on credit terms and aiming to safeguard against losses resulting from non-payment of commercial trade debts, account receivable insurance, also known as trade credit insurance or debtor insurance, provides a valuable protective measure. This insurance policy becomes especially crucial for companies delivering goods or services before receiving payment, offering a financial safety net in the face of potential non-payment challenges.
General Liability Insurance
Many businesses face claims of negligence, accidents, and injuries and many of them are frivolous and without merit. These claims can be costly to deal with and small business owners can find them to be a nuisance and an unwanted hassle.
These insurance policies protect you and your small business against payments for injury, medical expenses, property damage, slander, and libel, and help to cover the costs of appealing decisions in court.
Professional Liability Insurance
Any business that provides a service to its customers should consider getting professional liability insurance. This type of policy covers you and your business from errors, malpractice, and negligence claims that occur through providing your service.
If you practice as a doctor or medical technician, for example, you may be required to have this type of insurance before you can practice. It is often called malpractice insurance, or errors and omissions insurance.
Product Liability Insurance
This type of insurance is for businesses that produce a unique product and distribute it to customers, whether wholesale to suppliers or directly to consumers. You or your business may be liable for the safety of the product if it is defective or causes bodily harm.
These policies vary between businesses and the products they make. Different products have different liabilities, so expect to pay a little more for coverage if you produce electronic goods than if you make clothing for example. You may be required to have this insurance in place before you can distribute your product to consumers and suppliers.
Home Business Insurance
Many small businesses and startups make the mistake of thinking their activities will be covered by their home insurance policy when working from home, but this is a mistake. Most commercial home insurance policies do not cover home businesses, their liabilities, or the cost of replacing their inventory.
You can add riders to an existing home insurance policy to cover your business assets and liabilities, but these will only offer limited coverage. It is best for small businesses being run from home to have their own insurance policy, separate from the home’s insurance.
Insurance is an important part of running a business. It protects everyone – consumers, employees, and business owners. When you are setting up your small business make sure you research the different liabilities you will have and how to insure yourself against them.
5 Types Of Insurance Every Small Business Should Have
