The 7 Types of Insurance Business Owners Value Most
No entrepreneur is safe from lawsuits and legal challenges, no matter how small your business may be. Companies of all sizes can become a primary target for lawsuits and other catastrophic events that will shut the operation down.
Since 90 percent of startups fail these days, this isn’t a risk you want to take. When a business fails due to financial reasons, it’s often because of a simple mistake.
Sometimes, that mistake involves getting stuck with liability claims when you don’t have insurance. For example, a firm that has company vehicles must insure its drivers to protect itself and the employees from lawsuits and exorbitant expenses.
It’s worthwhile for your business to invest in several crucial types of insurance coverage to protect your interests. The following list of most useful types of business insurances can help insulate your company from failure.
1. Professional and General Liability
General liability provides for defense and pays damages if your employee, product, or service causes bodily injury or property damage to a third party. Professional liability insurance, commonly known as errors and omissions insurance, goes a step further and protects the company from a lawsuit when services are improperly rendered. Now that lawsuits fly left and right, companies typically value liability insurances above any other type of coverage.
Any property associated with your business, whether the building you operate in or the equipment and tools you use, will need this policy to protect it from harm. You never know when a disaster will strike, or a thief might break in. This insurance protects your property from damages and loss.
3. Worker’s Compensation
When employees become injured on the job, this insurance will provide wage replacement and cover medical costs and out-of-pocket expenses. Not only does this insurance save you money, but it also protects you from legal penalties that surface as a result of activity by unions and state laws.
4. Business Owner’s Policy (BOP)
Most of your insurance policies will protect your employees and the business, but it’s also important to protect yourself. A BOP is an accumulation of several forms of insurance designed to guard your good name, such as liability, business interruption, property, and crime insurance. A BOP generally allows you to choose the policies you would like to use for your company at a bundle price.
5. Data Breach
Hackers are heavily active today, which makes data breach insurance more and more worthwhile. Based on current statistics, 60 percent of businesses that experience a data breach will shut down within six months of the incident. This insurance can provide financial and legal protection against the loss, and potentially keep your company in business.
If you operate any vehicle for your organization, it must be fully insured to protect the vehicle and anyone who drives it. If an accident should occur, this insurance gives the employer the ability to cover damages, medical bills, and other expenses, as well as avoid a major lawsuit.
7. Business Interruption
Many things can interrupt business operations, such as a natural disaster, loss of income, damage to the city water line, or impairment of the physical property. This insurance will protect your company from financial loss while the crisis gets addressed.
Having the right insurance plan is more important than many business owners realize. The ability to protect yourself from damages and losses is integral to staying afloat in this economy.