10 Types of Business Insurance You Need to Know About
Did you know you can buy insurance for things you accidentally leave behind in an Uber?
Insurance is one of the most important things for a business owner to know about. Business owners can purchase insurance to protect just about every aspect of their business. Not having proper insurance can cause catastrophic loss if something goes wrong.
Once a loss occurs, it is too late if insurance is not in place. Maybe you have insurance but do not fully understand your coverage.
As a business owner, you can never be too careful to protect your company, your employees, and your reputation. Insurance can be a confusing subject.
There are so many types of insurance and it can be hard to determine which types are right for your business.
Business insurers specialize in helping business owners decide what types of insurance their business needs and use their expertise to make sure business owners understand their coverage and deductibles.
In this article, we will look at 10 types of business insurance that every business owner should know about.
1. Property Insurance
As a business owner, chances are that you own property. Whether you own your own building or have business personal property, you’ll want to protect this property.
Business personal property consists of office equipment including computers, your inventory, your tools, and more. Property insurance protects you from damage and loss of this property by means of fire, flood, vandalism, theft, mysterious disappearance, smoke damage, and other common causes of loss.
2. Business Interruption/Loss of Earning Insurance
This type of insurance covers the lost income that a business may suffer after a disaster. The coverage extends to income lost as a result of the business closing after a disaster or as a result of the rebuilding process after a disaster.
3. General Liability Insurance
Every business needs liability insurance.
General liability policies protect you from lawsuits by covering damages. It also provides a defense if you cause or if someone accuses you of causing damage to a third party.
Put more simply, this insurance covers any property damage or bodily injury caused to someone by your negligence. This means if your property, products or services, employees, or you cause the damage, the insurance will cover the cost of the damage or defend you in legal action.
Liability insurance covers a wide variety of scenarios, and it is essential to have. One frivolous or fraudulent lawsuit could bankrupt your company in legal defense costs alone. Making sure that you understand the limits and conditions of this insurance is extremely important.
4. Commercial Auto Insurance
This type of insurance protects company vehicles and the employees operating them. These can be vehicles that carry employees, products, or equipment.
Should these vehicles be involved in a collision, commercial auto insurance offers liability insurance to cover damages to a third party if the collision was caused by the negligence of you or your employees.
Commercial auto insurance also provides first-party coverage to your vehicles for damages arising from a collision or comprehensive cause.
If your employees are using their own vehicles for work done for your business, you can add them to your commercial auto insurance policy under non-owned coverage. You can also add hired coverage for rented vehicles.
5. Errors and Omissions Insurance
This type of insurance is professional liability insurance that provides coverage for damages and legal defense resulting from failure or improper performance of professional services.
This type of coverage is excluded from general liability insurance policies, so purchasing a separate policy of this nature is necessary. This kind of insurance usually applies to insurance agents, lawyers, accountants, consultants, etc.
6. Worker’s Compensation Insurance
This type of insurance provides coverage for your employees if they are injured on the job.
This coverage provides lost wages and medical payments coverage to these employees in exchange for their right to sue the company. Some states mandate this coverage, and failure to have coverage in place may result in hefty fines.
7. Umbrella Insurance
This is a type of excess insurance that can be purchased on top of existing policies. It is basically an extension of another insurance policy.
You can purchase umbrella policies to cover different kinds of claims from general liability to auto insurance. This coverage only comes into play when the limits of the underlying policy are exhausted. The conditions of these policies usually follow the form of the underlying policy.
8. Homeowner’s Insurance
If you are a small business owner or conduct business out of your home, you might consider purchasing homeowner’s insurance.
This is an essential type of insurance that protects against damage to your home in the same vein as property insurance and also covers damage to property inside the home.
This type of coverage also provides liability insurance for accidents that might happen at your home or other places due to your negligence. It also provides a defense against allegations of the same nature.
9. Data Breach Insurance
This newer form of insurance provides protection against the loss of sensitive or private information about employees or clients that is stored by your business as a result of a data breach.
This information is commonly stored on computers, servers, or in paper form, and as a business owner, you are responsible for protecting the non-public information.
10. Directors and Officers Insurance
This type of insurance covers the directors and officers of your company for any actions of theirs that affect the operations or profitability of the company.
This will be excluded under the general liability policy, meaning this policy needs to be purchased separately. This coverage will provide legal defense in the event of a lawsuit against a director or officer of your business resulting from their actions on the job.
Protect Your Business By Using These Types of Business Insurance
While these are not the only types of business insurance available to business owners, these are 10 of the most important options and ones that every business should have in place.
Contact us today to discuss your business insurance options with a licensed insurance agent.
For more information on the business insurance packages we offer, visit our commercial insurance page.
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