Owning a business means exposing yourself to many risks. Whether you own a small or big company, therefore, you need insurance policies to protect yourself against unforeseen risks. Forgoing insurance for your business may save you some cash in the short term, but it could prove disastrous in the long run.
Here are some of the insurance policies that you could take to protect your business:
i. Professional liability insurance
Every business should have a professional liability insurance policy. This policy is also referred to as errors and omissions (E&O) insurance. It protects the business against lawsuits due to harm that results from employee negligence. There are numerous professional liability insurance policies offered by different insurers. As a business owner, you have the responsibility of determining which professional liability insurance would provide you with adequate protection.
ii. Property insurance
Every business should have property insurance, whether it owns the property or leases it. This insurance policy covers equipment, inventory, signage, and furniture in the business premises against accidents like fire, theft, or storms. It is vital to note that these insurance policies do not cover disasters that have the potential for mass destruction. This means that they do not cover losses resulting from earthquakes and floods. Such events are insured under the standard property insurance policies.
iii. Life insurance
Life insurance is an important insurance policy for any business. The insurance policy covers beneficiaries of the principal partners and critical employees of the business. If a person who is a principal partner or essential employee dies, the policy entitles their beneficiaries to get compensation for it. The typical life insurance cost for most business partnerships is relatively cheap. This ensures that businesses can afford it.
iv. Employees’ compensation insurance
Once a business starts hiring, it needs to have insurance coverage under the workers’ compensation insurance. The policy covers employees’ medical costs and offers disability and death benefits to the beneficiaries. The business should take workers’ compensation insurance for all employees regardless of the amount of risk involved. This is because an unforeseen accident could lead to pricey claims that might end up using up too much of the firm’s resources.
v. Product liability insurance
This type of insurance policy is for firms that manufacture and sell products to consumers. The cover protects consumers of the products from any potential damages that might result from the use of the product. Product liability insurance also protects the business from the potential losses that it would have incurred fulfilling the compensation claims filed by customers.
vi. Vehicle insurance
If a business has company vehicles, they should be insured to protect it from liabilities associated with vehicular accidents. The minimum insurance policy that a firm should have is the third-party injury cover. Comprehensive vehicle insurance should also be a priority for businesses because it covers the business vehicle against damages too. In instances where employees use private cars to carry out company activities, their insurance cover should also be sufficient.
vii. Business interruption insurance
Every business should take up this insurance policy to protect them against the uncertainties of the future. The policy covers potential losses that could arise from the interruption of normal business functioning. The business interruption insurance is for businesses that operate from a specific location.