Any number of things can cause your business to shut down temporarily or permanently. If that were to happen, would you be ready? Every business, whether big or small, needs business insurance to protect it from all of the potential hazards out there. There are several different components of business insurance coverage including property insurance, liability insurance, and worker’s compensation insurance among others. The size of your business, how it is owned, and what industry it’s in are the most important factors to consider when insuring your business.
If you own the building your business is housed in, you need property insurance. Just like home insurance, property insurance protects your physical property including the building and everything that’s in it. If you are leasing a space from a landlord, the landlord should have building insurance, but you still need to cover the business personal property inside it. This is an important part of business insurance, because should there be a fire, an earthquake, a hurricane, or any other disaster, your business property will be protected.
Included in many property insurance policies is coverage for loss of income as well. That means if your business is forced to close temporarily because of any of the covered factors, you will be covered for the income the business would have made during that closure. Many circumstances can cause you to close including power outages, gas leaks, equipment breakdowns, etc. In those instances, without proper insurance, the money your business would lose could be enough to force it to close permanently.
Liability insurance is perhaps the most important component in business insurance these days. The current business environment is a very litigious one, and a lawsuit could be the end of your business. Liability insurance protects your business from having to pay expensive legal fees and damages if it is sued. Even suits without merit can cost your business serious money, so it only makes sense to protect your business as much as possible.
There are several types of business liability insurance including Commercial General Liability (CGL), professional liability, and product liability. Commercial General Liability insurance covers your business against claims of injury, property damage, advertising claims, and fire liability among other things. This type of liability insurance will protect you against slip and fall suits, for example. Professional liability insurance, also called errors and omission insurance, protects service professionals against having to pay damages due to malpractice and negligence. Product liability, sometimes included in CGL, protects businesses that sell or make products should those products cause damages.
Finally, worker’s compensation insurance is a requirement for any business with employees. This insurance will protect you should one of your employee’s become injured on the job. If you don’t have employees in your business, it’s unnecessary to carry worker’s compensation insurance.
The goal of business insurance is to protect your business, your business relationships, and yourself in the event of an unforeseen predicament that threatens the health or survival of your business. By paying a little upfront in premiums, you can safeguard against having to pay a lot in the end. You never know what issues may arise in the future, so it is your duty to plan for the worst-case scenario before it happens.