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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
What Kind of Business Insurance Do You Need?
Insuring one’s own business is one of the first things that entrepreneurs do during the setup period itself because the real world does not always follow the rules and unexpected incidents can strike at any moment. Irrespective of how improbable it may seem right now, natural disasters, robberies, theft, accidents, vandalism, and terrorism are just some of the many things that never announce themselves beforehand. This is why you need business insurance for peace of mind and for having a safety net, in case anything actually does go wrong. To figure out the possible business insurance policies that you would need, go through the following insurance types and their usefulness.
General Liability Insurance
This is the most inclusive and recommended insurance for small businesses because it protects you and even your employees against almost everything when done right. Some of the usual damages covered by general liability insurance are as follows.
- Protection against personal injury for both the employer and the employees
- Property damage due to any of the possible causes such as natural disasters and acts of vandalism or terrorism
- Medical expenses
- Slander and libel
- Legal expenses
Now, general liability might be sold to you as one single insurance to cover everything, but as an informed customer and concerned business owner, you will need to go through the fine print yourself.
While it is true that general liability can cover a lot of things, it doesn’t necessarily mean that the particular policy you are opting for covers everything as well. For example, some companies allow you to select and add the protection options that you think are most valid for your kind of business. By including and excluding coverage options you will be able to craft a policy that protects your business and employees in the best way possible. You will need general liability insurance even from a general business perspective since a lot of companies and clients might refuse to work with you unless you can provide them with proof that you have general liability insurance.
If you have a personal business or run a small-scale establishment, visit the Next Insurance website to get an instant quote on a custom-made, affordable policy that will be tailored specifically for the kind and scale of business that you are involved in. In fact, you can complete the entire process online to save time that you can dedicate to your actual business.
Property Insurance
You will probably not need this if you already have general liability insurance because reliable insurance companies usually include property insurance as part of the package when you buy liability insurance. Even so, you need to check with your broker to be sure, whether you already have general liability insurance or planning to get it. Just in case property insurance was not included in your package, you will need to get it separately. In a scenario where the business is being run from your home itself, home insurance may not cover any losses related to your home-based business. Talk with your insurance company about this to find out for sure, but do make sure that your business property has insurance coverage.
Professional Liability Insurance
Professional liability insurance is particularly necessary for those who are in a service business, such as a physician’s practice, an accounting business, or a financial consulting business. Generally, professional liability insurance is alternately referred to as errors and omissions insurance because it covers you against professional negligence and mistakes, i.e. when a client files a lawsuit on such grounds against any service provided by you or your company. A lot of professionals, including doctors, are required to have a professional liability license in order to practice. It is important to figure out if you need liability coverage.
Product Insurance
When a product manufactured, distributed, or sold by your business establishment causes injury to someone, you are vulnerable to a lawsuit and product insurance makes sure that the financial losses you suffer because of that lawsuit are covered for.
Once again, this is one of those types of insurances that comes in bundled as a package with your general liability insurance, but just in case it doesn’t come like that by default, make sure that it is being offered as an add-on at least.
Commercial Auto Insurance
If your business involves vehicular operations, you need commercial auto insurance. It isn’t uncommon for commercial vehicles to be involved in road accidents, so as a business owner, you need commercial auto insurance to make sure that the damage caused by the vehicle to others involved in the accident is paid for by the insurance company, not unlike personal car insurance. Depending on the policy you choose, you could also be compensated for the repair/replacement costs of the damaged vehicle.
Workers Compensation Insurance
Accidents at the workplace are quite common, and so are workplace-related accident claims. Workers compensation insurance financially protects you from such lawsuits and pays for everything from medical bills to missed wages and long-term compensation for the injured party. Even if you are in a state like Texas where you do not need workers compensation insurance to start a business, it’s probably a good idea to get one anyway.
While this should give you a general idea of what to expect, you will still need to discuss the details with your insurance company, to understand how everything will work and what are the best policies that they have for you.
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