Upon the first day you open up your business, you expose yourself to certain risks. Even before hiring the first employee, your business is already facing some risk, making it extremely crucial to get the right insurance in the first place. Just a single lawsuit or unforeseen natural disaster could wipe out your entire business before it can even launch.
Even when you are a small business, having the right insurance coverage is a must. After all, disasters are indiscriminate how big or small your business is or what industry you are in. There is a wide range of insurance types that would help you protect your business interest. Here are the top 8 of them you need to consider.
Types of Insurance You Need to Protect Your Small Business
Professional Liability Insurance
Also called errors and omissions (E&O) insurance, this type safeguards any enterprise against negligence claims from mistakes or failure to perform the business. However, there is no one-size-fits-all policy for this insurance coverage. Since each industry has varying concerns, it shall be addressed in customized policies.
Whether leasing a space or owning a property, any business needs property insurance. The insurance coverage of this type of insurance includes signage, equipment inventory, and furniture in the event of theft, storm, or file. Nonetheless, events like earthquakes and floods are generally not included in standard insurance packages.
Workers’ Compensation Insurance
As soon as you hire your first employee, you need to add workers’ compensation insurance to your business’s insurance policy. Workers’ compensation covers disability, medical treatment, and death benefits if an employee becomes injured or dies in the line of work. Even if your employees are only doing low-risk work, their injury or accident could still result in an expensive claim.
Home-Based Business Insurance
A lot of entrepreneurs start their own small businesses in their homes. Sadly, not all homeowner’s policies cover home-based businesses in the same way commercial property insurance does. If you are operating your business at home, consider looking for home insurance quotes that include coverage of your supply and equipment if a problem arises.
Product Liability Insurance
If you sell products to the general market, consider getting product liability insurance. Even though your business has taken all the necessary measures and made extra steps in ensuring that your product is safe, a lawsuit caused by your merchandise is not far from impossible. This insurance coverage protects you in the event your product causes damages to a customer.
Commercial Auto Insurance
If your business uses company vehicles in operation, make sure that they have been fully insured. Getting commercial auto insurance protects your business if any liability arises from vehicular accidents involving your vehicle. At the minimum, your small business should be insured against third-party injury. However, a comprehensive business insurance policy could cover it as well.
Data Breach Insurance
If your small business stores sensitive or non-public data of your customers or employees, then you need to consider purchasing a data breach insurance policy. This type of insurance protects your business from any cyber attacks, data loss, and malware. In this day and age, where almost everything is done digitally, having data breach insurance is a must.
If you are eager to look after the best interest of your employees, then consider getting unemployment insurance. In a tight labor market, this insurance is a wonderful incentive that helps attract more potential employees to your small business. If you want to entice highly qualified and competent candidates to your company, consider purchasing this type of insurance.
There is plenty of other business insurance you need to familiarize yourself with as your business continues to expand. Nonetheless, the eight listed are the essential ones you need to have for your small business.