From the start of a business, there are some risks that you are exposed to. Having the right insurance in place is important, even before hiring your first employee. Sometimes a single event or a lawsuit could be enough to end a small business before it had the chance to stand on firm grounds. Luckily, a wide range of insurance types is available to protect small business against these dangers. We have compiled a list of insurance types that a business should have in place as soon as possible.
Professional liability insurance.
Professional liability insurance, also known as error and emissions (E&O) insurance, covers your business against negligence claims due to harm resulting from mistakes or failure to perform. Each industry has its own concerns, there is no one-size-fits-all policy that covers all professional liability insurance.
This insurance covers the equipment, inventory and furniture in event of fire, storm or theft. It must be noted that mass-destruction events such earthquakes and floods are usually not covered by a standard property insurance. You must inquire and check with your insurer for a separate pricing and policy, in case you live in area where these issues are common.
Workers’ compensation insurance.
When you hire your first employee, workers’ compensation insurance must be added to your business’s insurance policy. This insurance covers accidents that results from working with your business. It includes medical treatment, disability and death benefits in case an employee is injured or dies. Some pricey claims could result even in a low-risk work, such as slip-and-fall injuries or tunnel syndrome.
Many professional businesses start as small home businessess at home. If your business is done out of your home, the common homeowner’s policies generally don’t cover home-based businesses in the same way property insurance does. Be sure to ask your insurer to cover the equipment and inventory of your home-based business using an additional insurance.
Product liability insurance.
Product liability insurance is requires in case your business manufactures products for sale on the general market. You can find yourself named in a lawsuit concerning damages caused by one of your products, even if you take all the required safety procedures. You need to protect yourself against such cases with product liability insurance that can be tailored according to your specific product type.
The vehicles that your company may use must be fully insured to protect your business against any liability in case of an accident. You should insure against any third-party injuries caused by your vehicles. You employee’s personal insurance will cover them if they are using their own vehicles for business, with the exceptions of goods and services delivered for a free.
Business interruption insurance.
A business’s operations will most likely be interrupted in case of a disaster or catastrophic event. You will suffer from the loss of income due to the inability of the staff to manufacture your product, and perform the necessary marketing and selling. This is usually the case for companies that require a physical location to operate.
Having the right insurance can save you major financial loss due to catastrophic events or lawsuits.