To succeed in business you must take risks in some areas and reduce or eliminate risks in others. There are some risks that a business leader can’t avoid but insurance can help if things go wrong. Even so owners often try to save money on insurance by choosing less expensive plans or needing more coverage.
How can you ensure your business has the insurance to get through a significant natural disaster, an injury to a customer or employee or a product that doesn’t work? The ten most important types of business insurance should all be present in the right amounts in your company.
10 Types Of Insurance Policies
General Liability Insurance
General liability insurance is like a safety net for your business if something terrible happens. It protects you from claims from third parties for injuries or damage to your property. For example general liability insurance is meant to cover claims like this if a customer falls and gets hurt at your business. It is important to remember that general liability insurance doesn’t cover the company property.
Property Insurance
Business property insurance will pay to fix or rebuild if your business buildings are damaged by fire hail theft, wind smoke or abuse. This insurance usually covers buildings but not other property like cars in a business fleet. A policy for commercial vehicles covers vehicles.
Some types of property insurance come with an extra called business interruption which will pay you back for lost income because of damage to your property. For example if a fire damages your car repair shop and only half of the bays are usable property insurance with a business loss rider would pay to fix the building and pay you back for the money you lost while working half as much as usual.
Fidelity Insurance
Most of the time fidelity insurance covers damage caused by crimes happening inside or outside the company. Fidelity insurance lowers the risk of loss from theft, fraud , forgery , dollars stolen by third parties and other offenses performed by an organization directors leaders committee members managers and workers.
Worker Compensation Insurance
Workers’ compensation insurance helps injured workers return to work and pays for their medical bills if they get hurt. In return for these benefits workers give up their right to sue their boss for injuries they get at work even if someone else is at fault. Except for Texas every state requires businesses to have workers’ compensation insurance.
Not keeping this protection current could lead to hefty fines depending on the state. Workers’ compensation insurance protects your employees by ensuring they get the proper medical care and money for injuries they get at work. It also protects business owners legally including from claims from employees who get hurt on the job.
Director And Officer Liability Insurance
Some hurdles come with running a business. Director and officer liability insurance or DO insurance adds another layer of safety for your leadership team. DO insurance covers losses or helps pay defense costs when a company directors and officers are sued for their choices. It can be paid to the directors and officers or the company itself.
Examining and knowing precisely what a specific DO insurance policy protects is essential. We suggest you include coverage for past present and future members and protection against claims seeking non monetary relief such as unfair termination, illegal discrimination failing to obtain insurance and wrongful termination.
Cyber Insurance
Cyber insurance protects you financially from the enormous costs that a hack or data breach could have. Some types of cyber insurance may cover costs that help your business recover from an attack like legal fees, forensic probes notifying customers and regulatory fines. These plans also cover lost profits from business interruptions, crisis management costs and public relations work to help your company regain customers’ trust.
Umbrella Insurance
Under umbrella insurance you are covered for more risk than other insurance plans. Your primary insurance plans like car workers’ compensation or general liability only cover you up to a certain amount. When that amount is reached your umbrella insurance kicks in.
This extra layer of security can be accommodated when there is a big responsibility claim or case like a big car accident with a lot of car damage. If you don’t have umbrella coverage you might have to pay for costs beyond your main plans’ limits. This could put your assets and the company finances at risk.
Representation And Warranty Insurance
During times of change like a merger or a purchase you should buy representation and warranty insurance to protect yourself financially if the representations and promises you made during the deal are broken. Depending on the amount purchased and the deal size this may be a good choice.
Tail Coverage
Tail coverage covers claims made after insurance has ended. This ensures you are still protected during times of change like when your company merges or the leadership changes. This could be helpful if most claims have time limits that end after you sell your business.
Commercial Auto And Non Owned And Hired Coverage
Commercial car insurance can cover costs related to accidents involving company vehicles like medical bills and damage to the cars themselves. It can also cover damage caused by an uninsured driver. However commercial auto insurance doesn’t cover cars your business doesn’t own like hired cars or workers’ cars used for work related tasks. With hired and non owned car insurance your business can cover vehicles the company doesn’t own.
Remember that the type of business you run affects the type of insurance you need. That is why it is essential to talk to a trained insurance expert about making a coverage plan that fits your needs. Ensuring your business has enough insurance can help protect your assets and lower potential risks.
Conclusion
Choosing the right business insurance policies is essential to lower risks and keep your assets safe. There are many types of insurance, from general liability to commercial auto insurance, so it’s important to talk to a trained insurance professional to ensure you get the right coverage for your needs. Enough insurance protects your finances and helps your business stay stable and grow over time.