Whether it be protection from natural disasters, accidents or complex lawsuits, business insurance can ensure that both your business and personal assets are protected. Depending on your state, needs and circumstances, you’ll want to understand which type of insurance is best for your business. Consider the below recommendations from the Small Business Association (SBA):
The Six Common Types of Insurance
The federal government already requires every business with any number of employees to have insurance in the form of workers compensation, unemployment and disability insurance. In addition to these, you’ll want to think about what kind of incidents could damage your business. Is your business located in a commercial area that is at risk for seasonal or natural disasters? Are you working from home and could have a higher risk on your personal assets?
If you have any concerns about your business protections, you may want to consider purchasing one or more of these additional policies:
- General Liability Insurance: Coverage that protects against financial loss at the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits and settlement bonds or judgments.
- Product Liability Insurance: Coverage against financial loss as a result of a defective product that causes injury or bodily harm.
- Professional Liability Insurance: Coverage against financial loss as a result of malpractice, errors or negligence.
- Commercial Property Insurance: Coverage against loss and damage to company property due to a wide variety of events. These may include fire, smoke, wind and hailstorms, civil disobedience and vandalism.
- Home-Based Business Insurance: Coverage that’s added to homeowner’s insurance as a rider can offer protection for a small amount of business equipment and liability coverage for third-party injuries.
- Business Owner’s Policy: A business owner’s policy is an insurance package that combines all of the typical coverage options into one bundle. It simplifies the insurance buying process and can save you money.
Buying Your Business Insurance
Once you’ve decided on what kind of protections you need, it may be wise to consult a commercial insurance agent to ensure you’ve decided on the best plan. Commercial insurance agents usually have a deeper understanding of the different policies and can help you find the ones that best match your business needs.
It’s also important to shop around for your insurance policy with different providers. Much like you would with a home or car, you’ll want to compare rates, terms and benefits from several different agents to find the policy that gives you the best coverage.
Yearly Reassessment
As your business grows, so do your liabilities. Each year—and especially if you’ve purchased or replaced equipment or expanded operations—you’ll want to contact your insurance agent to reassess your policy. You should discuss any changes in your business and how they might affect your current coverage. Expanding your insurance needs to fit your current business circumstances is necessary and shopping around for a better plan, if needed, is encouraged.
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