Building and running a business is hard work that requires a large monetary and emotional investment. All businesses are inherently risky. This is a reality that business owners must learn to ensure longevity, sustainability, and resiliency.
Mistakes and accidents happen no matter how good you are at what you do. An unexpected disaster or expensive lawsuit can cause enough damage to ruin your business. Therefore, it’s important to take a proactive approach to risk management and insurance coverage.
As a business owner, you need to be prepared for the unexpected. Insurance is one of the best ways to protect your finances when things go wrong. Having the right insurance coverage in place safeguards you from financial losses that could otherwise destroy your business. Insurance isn’t a luxury: it’s a necessity.
Here’s an overview of the most important insurance policies you should strongly consider purchasing for your business.
General liability insurance
General liability helps cover legal fees and medical expenses from bodily injuries and property damage that your business might be legally responsible for. It also covers settlement costs.
Commercial property insurance
Commercial property insurance protects the building from which you operate and its contents. It covers equipment, assets, and personal property used in the business from natural disasters, vandalism, fires, and theft. It may also include lost income as a result of any property-related incident.
Business owner’s policy (BOP)
A BOP combines general liability insurance and commercial property insurance into a single insurance policy.
Business interruption insurance
If you’re unable to operate your business due to an insured event like a natural disaster or civil disturbance, business interruption insurance covers ongoing costs so that you don’t have to dip into your savings to keep your business running. It can reimburse you for rent, lost income, payroll, and taxes.
Workers’ compensation insurance
Workers’ compensation insurance protects businesses from claims or lawsuits from employees who incur injuries while on the job or as a result of work-related duties. It’s a required coverage in most states.
Public liability insurance
Public liability insurance is designed to protect you financially if you cause injury to a person or damage property as a result of your actions at work. It helps cover the legal costs associated with a claim, as well as medical bills, replacements, repairs, and other expenses you may be responsible for.
Cybercrime is on the rise, which is why you need cyber insurance. This type of coverage protects you from financial losses in the event that your data is compromised due to a data breach, virus, or malware. It may also help cover costs associated with recovering data or restoring your company’s reputation.
Professional liability insurance
Professional liability insurance, also known as errors and omissions insurance, protects you from customers who might sue you for damages due to your negligence, errors, or malpractice in providing your services.
Product liability insurance
If your business manufactures, distributes, or retails a product, you might be liable for its safety. This type of insurance protects you from financial losses as a result of a defective product that causes injury or bodily harm.
Commercial auto insurance
If there’s a car accident where your company is found at fault, commercial auto insurance pays to cover the costs of medical bills and property damage sustained by the other parties involved. This is a good coverage to purchase if you or your employees use a vehicle for business purposes.
Commercial umbrella insurance
Commercial umbrella insurance adds an extra layer of protection to existing liability coverage by covering costs when liability limits of other policies max out.
Directors and Officers (D&O) insurance
This type of coverage is important for businesses that have raised venture capital or who have a board of directors. D&O protects leaders from your company from lawsuits alleging misrepresentation, breach of fiduciary duty, or breach of fiduciary duty.
Finding the right insurance for your business
Finding the right insurance for your business can be difficult. You have the option of making your coverage as comprehensive as you want it to be. Beyond the coverages that we’ve delineated, there are specialized policies for wide-ranging industries and add-ons to policies for more unique circumstances.
Having the right type of business insurance is just as important as the goods and services you provide. In order to customize an insurance program to your business’ needs and risk profile, connect with the Guided Solutions team today to discuss your specific exposures and the types of insurance you should consider purchasing to protect you from the unexpected.