9 Insurance Policies Every Business Owner Should Have
Among the many things you should consider when starting a business is the presence of business risks. Business success requires a combination of taking risks and mitigation efforts where possible. While business leaders can’t mitigate all risks, having insurance coverage protects the business from these exposures. Unfortunately, most entrepreneurs often skimp on taking insurance coverage for their businesses. Your business should have the following key insurance policies:
1. Long-term Disability Insurance
The prospect of sustaining long-term disability is frightening, but many people still ignore it. While you should anticipate a safe and secure business environment, you shouldn’t rely on hope for your future financial security. You should take a long-term disability policy for your employees in case they stop working because of debilitating injuries and medical conditions.
Long-term disability insurance provides the insured partial monetary benefits (50 or 60% of salary). Long-term disability benefits check-in immediately after short-term disability benefits end. Like other insurance policies focusing on employee welfare, long-term disability insurance benefits can be accessed when the worker becomes disabled or injured at work. Apart from finding the best insurance provider, you should learn how to find LTD lawyer who can help you navigate this challenging insurance realm.
2. General Liability Insurance
General liability insurance protects your small business from compensation claims for bodily injuries and property damage. Business owners are legally responsible for property damage and bodily injuries sustained by customers on your premises. General liability insurance also protects against reputational harm, copyright infringement, and advertising setbacks.
With this insurance cover, your business can maintain financial stability should it be sued by customers or other businesses. General liability cover also covers the legal costs and settlements. General liability insurance is a requirement by licensing boards, landlords, and most financial lenders.
3. Worker’s Compensation Cover
Worker’s compensation insurance protects employees who sustain injuries while at work. It provides replacement income and covers medical expenses incurred by injured employees. This insurance policy protects employers and businesses from being sued by employees for work-related injuries.
4. Property Insurance
Property insurance for your business covers the cost of rebuilding and repairing the physical structures of your business following unfortunate events, such as hail, fire, vandalism, or wind damage. Note that this insurance exclusively covers the building. It doesn’t cover any other property, be it a commercial fleet of vehicles and installations. Vehicles are protected by the commercial vehicle policy.
Most property insurance policies have a “business interruption” add-on, which compensates businesses for lost income resulting from property damage. For instance, if your motor vehicle repair shop is interrupted by fire, the property insurance policy covers the costs of repairing the shop and the total lost income for the period the shop couldn’t operate in normal capacity.
5. Data Breach Liability Insurance
Cyber breach insurance policy protects businesses from legal suits, fines, and lost businesses due to cyberattacks. It is an important policy for any business that stores customer personal identification information, such as phone numbers, addresses, social security numbers, and medical details.
6. Business Owner’s Insurance
Business owner insurance policy combines both property and liability policies into a comprehensive package at competitive rates. It is a good option for small businesses looking for affordable coverage. Medium-sized and established businesses with complicated insurance needs should consider buying separate policies for better coverage.
A business owner’s insurance policy protects the company from various incidents, including customer injuries and property damage. Because this policy is bundled, it is less expensive than individual coverages.
7. Key Person Life Insurance
You should take a key person life insurance if your business’s success depends on some key employees. Some companies depend on specific individuals for success. Therefore, losing such persons, be it the CEO or top talent, can lead to business closure. Key person life insurance protects the business from loss if the critical employee dies prematurely.
For instance, if your pharmaceutical company depends on a chemist to make products that will earn the company $5 million annually, the policy protects your company from unexpected losses should the chemist die before product launch.
8. Employee Practices Liability Insurance
Also called the employees’ liability insurance, it protects businesses from employment-related issues. This includes:
- Discrimination issues
- Sexual harassment
- Wrongful termination
9. Commercial Auto Insurance
Commercial auto insurance closely resembles personal auto insurance, only that it exclusively covers company vehicles or personal vehicles involved in business activities. If company vehicles are involved in an accident, the insurance compensates for:
- Medical bills of injured drivers and passengers
- Vehicle repairs to the company car or the other involved car depending on the party at fault.
- Vehicle damage caused by floods, fire, theft, and vandalism
Business owners should prioritize taking insurance policies for their enterprises for various reasons. Without the coverage, you’d have to pay for medical expenses, repairs, fines, and other claims out of pocket. These costs are huge and can lead to business closure.