Congratulations, you’ve started your business! Now it’s time to start protecting it. Simply setting up a new business can be overwhelming, but there are some basic things that all businesses need to consider when getting insurance coverage.
Types of Business Insurance Each Business Needs
In this article, we’ll go over the different types of insurance you should have in place for your company and how much coverage each type costs so that you can make an informed decision about what’s best for your company’s needs.
General Liability Insurance
General liability insurance covers damages to others for which you are legally liable. In other words, this type of coverage protects you from claims that your business caused or contributed to (called “liability”).
This type of policy typically covers bodily injury, property damage, and personal injury claims. It may also include coverage for third-party claims against the insured’s employees or suppliers if the injured parties were not working directly for the insured at the time of an accident; however, these types of policies are sometimes referred to as “third party” rather than general liability policies because they apply only when someone other than a current employee is injured by another person while working in your business
Property Damage Liability Insurance
Property damage liability insurance is a type of coverage that covers you for any damage to the physical property of another person or business. If someone damages your building, vehicle, or other assets while they’re on your premises (for example, if they hit a pole with their car), you’ll be covered by this type of insurance.
You can get property damage liability coverage through some types of general liability policies and even some health insurance policies—but it’s typically offered as an optional add-on feature in commercial policies designed specifically for businesses. The cost will vary depending on how much coverage you want; however, most companies charge between $2 and $3 per $1 million in aggregate value annually (or $10-$15 per year).
Business Auto Insurance
Business auto insurance protects your business against losses that occur while you are using your car in the course of business. It covers losses that occur when you are driving as part of your business, even if you aren’t on a job site.
Business auto insurance is important because it provides financial protection for any accidents that happen while employees of the company are driving their vehicles. If someone gets hurt while they’re at work and they need medical treatment, then this type of coverage will help with their hospital bills and other related expenses.
Cyber risks are a growing concern for businesses, especially those that handle sensitive information. Cyber risks include data breaches, ransomware, and extortion; these types of attacks can have serious implications for your business if they occur.
The cost of losing your personal information or being exposed to one of these cyber threats could amount to tens or even hundreds of thousands of dollars in damages depending on how much you lose and what kind of coverage you have. Fortunately, there are several different types of insurance available to protect against these risks including liability coverage (which covers legal costs), property damage coverage (which pays for the destroyed property), and business interruption coverage (which pays for lost revenue).
Workers’ Compensation Insurance
Workers’ compensation insurance is a type of coverage that protects your business from the costs associated with employees’ injuries. This type of insurance helps cover medical expenses and lost wages, as well as any other damages caused by an on-the-job injury.
It can also protect you in other ways, such as covering employees who are injured while traveling on business or working offsite (like contractors or subcontractors). And if another person causes an accident at your site, workers’ compensation will help pay for any resulting losses—even if it’s not related to your company’s operations.
Equipment Lease/Lease Purchase Protection Insurance
Equipment lease/lease-purchase protection insurance is a type of business insurance that protects you from financial loss, including the cost of replacing or repairing damaged equipment. This type of coverage also covers lost sales if a customer cancels an order due to damage caused by your business’ negligence.
This type of policy can help protect against claims like these:
- A lawsuit filed by someone who was injured while using your product or services
- A bankruptcy filing by one or more creditors
Financial Services – Business interruption coverage, lender’s risk insurance, etc.
Business interruption insurance, lender’s risk insurance, and other financial services are all types of business insurance. These types of policies can help protect your company against unexpected losses such as:
- Lost revenue due to a natural disaster or another event that disrupts normal operations of your business
- The cost of replacing equipment that was damaged during an event (like fire) or stolen (like theft).
This is a basic summary of the types of insurance many businesses need.
There are many different types of insurance that a business can purchase. It’s important to know what your needs are so you can get the right coverage at the best price for your business.
- Liability insurance – protects you if one of your employees causes an accident or injury while on the job
- General liability – covers any losses caused by bodily injury or property damage (e.g., lawsuits)
- Workers’ compensation – pays medical expenses and lost wages if an employee is injured on the job
- Auto insurance – protects your cars, trucks, motorcycles, and other vehicles used in business activities
We hope we’ve helped you understand that business insurance is a necessity for most businesses and should be taken seriously. If you have any questions about what type of insurance your business needs or how to get it, contact us so we can help you find the right company to work with!