Once you start a business, you expose yourself to all risks, and this is where an insurance policy comes in. Business insurance is critical in protecting your business interests, workers, and business associates. Even before you make your first profit, your business may be already at risk. One unfortunate event or lawsuit could be enough to destroy your small business and keep you out business completely or for an extended period of time. Lucky you, we are going give you some information on the insurance types that all business startups must have in place as soon as possible.
This kind of insurance protects your business ‘physical assets such as equipment, inventory, buildings, computers, and furnishings from damage or loss in case of man-made disaster. Such disasters include fire, theft. It also covers hailstorm and vandalism. However, mass destruction incidents such as earthquakes and floods are usually not covered under common property insurance policies.
Floods can take place any time. Heavy downpour often causes floods, but regional development may result in floods which cause loss of property worth millions. It is, therefore, safe to insure your business against floods regardless of where your business is located. A recent study revealed that almost all small business startups that experience floods fail to reopen.
Business interruption insurance
Whenever a catastrophic event occurs, business operations get disrupted. Your business, in turn, suffers losses because your employees cannot work. Business disruption insurance is therefore ideal for on-location businesses like retail stores. This type of insurance will compensate you for the lost income during the disastrous period so as to help you meet your continuing financial responsibilities for example rent.
General liability insurance
It is mainly referred to as liability insurance, and it covers your business against claims that may come as a result of property damage, injuries, libel or slander. Depending on what your business does, you may want to consider coverage like data breach coverage if you deal with personal information. Liability insurance helps you to cover the legal defense costs.
Workers’ compensation insurance
Depending on where you do your business, most states have a requirement that companies should provide workers’ compensation insurance for their employees. This type of insurance comes in immediately you hire your first employee. It will cover disability and death in the event of such incident. It will also include medical treatment. Regardless of the worker’s performance, he or she should be insured. Claims for example carpal tunnel syndrome could cost you more.
Commercial umbrella insurance
It is sometimes called umbrella liability; its primary purpose is to offer your business additional financial protection from potentially harmful accidents and lawsuits. It serves as a last resort support to other policies completing the possible gaps when other coverages have reached their limits. It may also protect against added liabilities not protected by your other commercial covers.
By having a proper insurance in place, a business can evade financial loss due to a catastrophic event or a lawsuit. If you are a startup business, you should seek advice on the type of insurance for your business.