As a business owner, one of the most important things you have to secure is insurance. Owning a business comes with its fair share of risks, unexpected costs, and unforeseen consequences. While there are basic business insurance packages, it’s important to note other kinds of specialized types like commercial truck insurance agent, cyber liability insurance, and the like.
Knowing the difference between the numerous kinds of business insurance will allow you to make sure that you are getting the right coverage for your company. Although your chosen business structure can protect you against lawsuits, these are typically confined to protection of personal property.
Business insurance, on the other hand, encompasses both personal and business assets. Business News Daily notes that since this offers both financial and legal protection, business insurance literally ensures that you can operate your company despite unforeseen events — even those that occur on the daily.
Thorough analysis of your company and potential risks is worthwhile if it means long-term safety, security, and success. Here’s all you need to know about business insurance:
Purchasing business insurance
If you are new to the process, the US Small Business Administration has listed four steps to simplify the process for you. This streamlined procedure should then become a yearly practice to ensure that your business is always ready, no matter what occurs.
The steps for purchasing business insurance assured standards are as follows:
Assess company risks
Take some time to imagine a contingency plan for the types of natural disasters, accidents, or lawsuits that may fall on your business’ lap and cause damage. Note these down to prepare you for the next step.
Work with a licensed agent
Qualified agents can help with the previous step and match you with policies that are suited to your particular business needs. Be sure to find an agent who is reputable and cares deeply about your needs as much as their own. Agents often get a commission for their work with your company.
Do not rush to secure a business insurance policy immediately. This should take careful consideration and planning. Since prices and benefits may vary, compare rates and terms to ensure you get the best value and deal.
Review and re-assess annually
Business growth may incur greater liabilities. Each year, you should review your expansion and re-assess how you should go about changing your insurance policies to see how these will affect your business.
Types of business insurance
Commercial property insurance
Bigger businesses that already have a hefty amount of physical assets or property will need this type of insurance. Commercial property insurance protects a business’ property from phenomena such as smoke, fire, natural disaster, vandalism, and civil disobedience.
This form of financial protection is ideal for the ownership or even rental of commercial spaces because of the aforementioned factors that are beyond your control. Note, however, that this may not always include coverage for the breakdown of equipment.
Depending on your company’s unique needs and status, there are various types of coverage for property insurance.
General liability insurance
This broad category covers bodily injuries, medical expenses, property damage, slander, libel, defending lawsuits, and matters regarding settlement judgments and bonds.
Keep in mind that this covers injuries done to your customers, damages to client property, and similar lawsuits.
Business owner’s policy (BOP)
Business owner’s policy is catered towards both small businesses and home-based businesses.
This policy is a package that includes the usual business coverage choices, saving resources and breaking down the insurance buying procedure. A BOP may also consolidate both your general liability insurance and your commercial property protection policy under a package at a cheaper premium rate.
Your company’s movable assets like office supplies, furniture, computers and accessories, and machinery for manufacturing and production are included here.
Business interruption insurance
In the unfortunate event of unprecedented or forced business closure because of property-related incidents, business interruption insurance may be needed.
Inland marine insurance
Movable business properties that may be temporarily in your company’s care may need inland marine insurance. Examples of these include museum artwork or precious items sold in a store.
It is recommended if you find that your business is mobile or frequently moves from location to location.
Professional liability insurance
Geared towards businesses who provide services, this type of business insurance protects against financial losses that arise from circumstances relating to negligence, errors, and malpractice.
Home-based business insurance
Home-based business insurance may come in handy for those who have put up their own small businesses over the course of the lockdown. It is often added to homeowner’s insurance to protect small amounts of business equipment or liabilities that emerge from third-party injuries.
Product liability insurance
Those who are involved in manufacturing, wholesale, distribution, and retail need product liability insurance in the case that a certain product is defective and may lead to bodily harm or injury in customers.