If you own or manage a business, business insurance offers important protections against losses from accidents, mistakes, employee misconduct, lawsuits and other liabilities. For those new to business insurance or looking to make sure they have the right coverage for their business needs, it’s important to understand the different kinds.
Here are five types of business insurance you should know about.
1. General Liability Insurance
General liability protects your business from a variety of unexpected situations. You and your business can obtain coverage from claims of injury or property damage caused from business operations. While it’s typically not required by law, general liability coverage is a good idea for most businesses that operate a location, visit client properties or run any kind of office or warehouse.
2. Product Liability Insurance
If your business sells any kind of physical product, you may want product liability insurance. This covers legal expenses if someone says a product you manufactured, sold or distributed caused an injury, damage or loss. Raw goods suppliers all the way through end-retailers should consider this type of coverage, as claimant lawsuits generally cast a wide net to maximize payouts. If you are not covered, you could have to pay for damages out-of-pocket.
3. Professional Liability Insurance
Businesses that provide any form of professional services could be well suited by professional liability insurance. Professional liability protects you against claims due to negligence, misrepresentation, bad advice (even if you think it is good advice) or losses due to the services you provide. Accountants, lawyers, writers, photographers, designers, consultants and many businesses should consider liability coverage.
4. Commercial Property Insurance
If your business owns or rents a property, commercial property insurance may be a wise decision. Just as homeowner’s insurance protects you and your property from losses due to fire, theft and other covered incidents, your insurance policy would pay for losses up to policy limits. Most businesses wouldn’t want to buy this coverage alone. It pairs well with general liability insurance and other business insurance. If you buy multiple policies from the same insurer, you may qualify for discounts.
5. Home-Based Business Insurance
With the ease of doing business online, a growing number of entrepreneurs and side hustlers run businesses out of their homes. If that sounds like you, home-based business insurance could be a smart choice, particularly if you ever host clients or vendors at your home office or workshop. Home-based business insurance picks up where your homeowner’s policy stops. That may include coverage for business-owned computers and equipment, files and other covered business property and liabilities.
Is Your Business Insurance Offering the Right Balance of Value and Protection?
It’s easy for a business owner to unknowingly underinsure or over insure. When you underinsure, you could be liable for huge costs in the event of an accident or claim. On the other hand, if you over insure, you could be paying too much for coverage that you really don’t need.
