Insurance is essential for any business, whether it’s a well-established company or a startup. As an aspiring entrepreneur, you must know there is no business without risk. Anything can go wrong at any time, and you must learn to expect the unexpected to keep your business afloat. Some insurance policies are required by law, while others are optional; In both cases, they provide coverage for your business, which will protect your assets and employees and encourage prospects to invest in your business. To safeguard your business interests, take a look at the most common and important kinds of insurance and what they do.
Comprehensive General Liability Coverage
This insurance is one of the essential coverage you must have as it protects your business against any claims regarding personal property, injuries, property damage, or advertising injury. For example, if a visitor got injured on your premises, they can file a lawsuit against you. General liability covers your business against these lawsuits as the insurance company provides a defense for your company and covers the costs. This coverage comes in handy when a product of yours malfunctioned with a customer; liability coverage will cover all claims regarding any damages that may have happened, say the experts at The Balance SMB. Even if an employee of yours offended a competitor, the coverage would take care of any advertising injuries.
Naturally, the insurance companies add coverage exclusions so they won’t have to cover everything. So, keep in mind what your insurance will cover and what it won’t, as this can cause several inconveniences along the road. You can purchase certain policies that will cover your business aspects. For example, you can purchase copyright infringement if your business is involved with intellectual property.
Workers’ Compensation Insurance
In Massachusetts, it is required by law to have workers’ compensation insurance. Whether it is required or not, it’s vital to have one if your employees perform physical tasks. This insurance covers the medical and rehabilitation costs of any injuries that happen on the job. It also covers the lost wages when the employee is unable to work until they return to work. Aside from protecting your business from lawsuits, it also protects the well-being of your employees. For example, a programmer who gets carpal tunnel because they are typing code for a long time, the insurance covers their medical expenses and lost wages while protecting them from any lawsuits from the employee. Workers’ compensation insurance is usually paired with employment liability insurance that insures your business against claims of sexual harassment, discrimination based on gender, race, or other types.
Auto Insurance
If your employees use company vehicles to commute to and from work or to distribute your products, it’s imperative to have auto insurance. Many auto insurance plans can protect your business against liability and cover the costs resulting from auto accidents. If an employee used his own car for business, this insurance wouldn’t cover the accident as it mainly covers commercial vehicles, so make sure your employees use company cars for all business-related commutes, say the experts at LoPriore. The policy limits can affect the insurance considerably, so ensure you have enough to cover any personal injuries, car accidents, and property damage.
Property Insurance
Whether your business owns or leases a building, property insurance will cover your company’s buildings, furniture, computer, virtual data, and other physical assets in case of loss or damage. In case of theft, fire, or vandalism, this insurance will provide repairs or replacements for your damaged assets. It covers the loss or damage of assets from natural disasters such as earthquakes and hurricanes. Property insurance is essential to have when you start your business, especially if you have a loan from a bank, as they require this insurance. Business partners and angel investors also require that you purchase property insurance to invest in your business.
Additional Coverage Options
Property insurance will cover the costs of damages or loss, but how can you recover from the losses of business interruption? Fortunately, a business interruption coverage will cover all the expenses and lost income during a business interruption. This insurance requires that you have a physical location for your business, such as a store. Business interruption coverage can be purchased with the property insurance or separately explains Reference for Business. Banks usually ask for life insurance before granting a loan, so you must purchase life insurance that covers the cost of the loan while the beneficiary in this insurance will be the bank. It is advisable to get disability insurance for yourself and key members of your company as you’re the most important asset in the business.
Final Thoughts
Accidents happen, and if any of you suffer a long-term injury or illness that can last for months or years, the disability insurance will provide a fixed amount of your income for as long as you are unable to work. Directors’ and officers’ liability insurance protects the decision-makers of your business from claims or claims from stockholders who thought the decisions impacted the company’s value or image negatively. This insurance covers the cost of defense; it offers for either the key personnel or the company itself.
Nowadays, endless types of insurance cover almost every aspect of the business, from the employees to the company assets. You need to know what aspects you need coverage for and choose your insurance plan accordingly. As a budding entrepreneur, you might find most of these insurance policies costly, and you probably would rather invest this money in other areas to grow your business. However, some insurance policies are mandated by law while others are essential for your business’s survival, so never underestimate the importance of proper insurance coverage. While on the hunt for the best deals, make sure to compare your options and carefully read the policy conditions before signing on the dotted line to make an informed decision. Some policies are included under a bigger policy, so you can purchase an umbrella policy to cover your business from any liability not covered by the insurance you already have.