From the moment an entrepreneur decides to start a business, he or she is exposed to certain risks that could spell doom for the business. Luckily, there are insurance policies that one can take advantage of to secure profitability of the business.
Here are 6 types of insurance that every business should know.
Whether the business owns or leases its space, having a property insurance policy should be a top priority. This kind of insurance covers all the equipment, inventory, furniture, and everything else on the premises from unforeseen occurrences such as fires and water damage. It is imperative to know what the policy covers before signing the documents to avoid inconveniences down the road. You should also note that the standard property insurance policies do not cover property against mass destruction calamities such as earthquakes and floods.
Professional Liability Insurance
One of the benefits of having professional liability insurance is that it cushions the business against various negligence claims that could arise from failure to perform or mistakes. Every industry has its concerns and challenges, and so it is imperative to request the insurance company to customize the policy to suit your business and market.
It is also important to train your employees extensively on how to do various tasks to avoid filing too many claims. Note that the higher the risks associated with your business, the higher the monthly premiums.
Product Liability Insurance
A product liability insurance policy is a must for businesses that manufacturer and sells products online or a brick and mortar storefront. During the manufacturing process, flaws can result in low-quality products that can cause injuries to the customers. The consumers can file a case in court if that happens, and it can result in the loss of thousands of dollars and valuable time that would have been used to improve the business operations.
Product liability insurance will protect your business from such scenarios. The policy is structured to suit the type of products that you offer and the current industry standards. Make sure that you get a comprehensive understanding of the policy before signing to be sure that it suits your business.
Your business will need a fleet of vehicles at the start and as it scales up for various purposes such as transporting the finished good to customers. These vehicles need to be fully insured to protect your business from liability if an accident occurs. Go for the comprehensive coverage that insures not only the vehicle and driver from any snafu on the road.
On the other hand, if your employees usually use their vehicles, their insurance will cover them if they are involved in an accident. The only exception is if they are delivering services and goods on behalf while being paid.
Business Interruption Insurance
Catastrophic events can interrupt your business operations. During this time, the company will suffer from lost income due to an employee’s’ inability to work in the office, make sales calls, manufacturer products, and the list continues. Thankfully, you can cushion yourself by having business interruption insurance in place. As the name suggests, this policy is designed to compensate your business for lost income and customers during such unfortunate events. It is essential for companies that operate from a brick and mortar facility and rely on it to do business. An excellent example of a business that should have this policy is a retail store.
Travel Insurance is extremely important for any business person on the go. Having the ability to cover your belongings is priceless, especially if you are traveling overseas for work. Should your luggage get lost or your computer is broken in transit, your travel insurance policy can save the day and replace your computer. These policies can also cover the family of the insured and the company should the worst happen on your journey. Make sure you retrieve a quote for travel insurance before you purchase your policy.
Own a business in today’s world can be a profitable experience, but one uninsured issue can lead to you having to close your doors. You have the ability to cover your business and stop insurance issues from sinking the ship. Make sure you take your time when it comes to finding the right policies for your business because there are so many options to choose from.
The point is, make sure you are covered. It’s always more cost effective to pay in preparation for the worst than it is to cure the cost of the unexpected.
Do you have any insurance types people should know about when they start a business? What policies do you hold to cover your operations? Share in the comments below.