Top Types of Mandatory Business Insurance
As a business owner, you need ample insurance protection for the various risks you face just by opening your doors. You may need insurance protection for employees. You may need insurance in place to protect your assets and even the business itself. Liability insurance may be necessary to protect your personal finances as well. With numerous types of insurance necessary to operate a business safely, it is rarely a good idea to overlook it. Consider the various types of insurance plans most businesses need to consider.
Both general and product liability insurance may be necessary for your business operations. General liability insurance helps cover legal hassles due to the claims of customers or others that are the result of accidents or injuries. Claims of negligence can be very costly for a business to cover outright, but this type of policy covers property damage, bodily injury, libel, slander, and defense against lawsuits. Product liability, also important for businesses selling products, helps to protect defects that can cause bodily harm to the consumer.
A third type, called professional liability insurance, provides protection from risks such as errors, negligence, and malpractice. Some state laws may require you to have this type of insurance, especially if you are a doctor or a dentist.
Owning property as a business means that there is a need for insurance to cover it. Property insurance for commercial buildings should include protection from weather events such as wind and hailstorms, as well as damage from fire, smoke, vandalism, theft, and civil disobedience. This insurance should cover the building, as well as business interruption, assets, company papers, money, and lost income.
Workers’ Compensation Insurance
Workers’ compensation insurance can help to reduce some of your risks. This type of insurance covers injuries and lawsuits that may stem from employee-related accidents or injuries. For instance, if an employee falls and injures himself, the cost of his lost time at work, medical bills, long-term disability, or even death (in some cases) can be covered by a workers’ compensation policy.
Other Insurance Needs
Businesses may need additional types of insurance, including:
- Asset-based insurance, such as specific coverage for equipment or highly valuable electronics you need to use.
- Vehicle insurance for your single vehicle or your fleet is not only mandatory in most states (for liability protection), but also can prevent costly lawsuits.
To reduce costs, you may be able to get into a business owner package, which bundles multiple types of insurance together at a reduced cost. The best way to know which insurance you need is to talk to your agent about the options that apply to your specific industry and business model.