One of the biggest benefits of having business insurance is the financial protection it offers when unforeseen accidents and calamities threaten to derail your operations. Having the right policy plays a key role in helping your business recover faster. But with the myriad types of business insurance policies out there, how do you know which one provides the correct coverage?
This is what Insurance Business will help you with in this article. If you’re a business owner trying to work out which policies match your unique needs, this guide can prove handy. We will give you a rundown of the different forms of coverage you can access and the kind of protection each one provides. Read on and find out what types of business insurance policies suit you.
What types of business insurance policies should you consider?
Your business faces a unique set of risks and challenges that are different from those of other businesses. That’s why there’s no single policy that can cater to every need.
Business insurance carriers provide a range of policies that can help protect your company. The selection is diverse and the kind of coverage you require depends on several factors including size, scope, and location. Here are some of the most essential types of business insurance policies you need to keep your operations going when accidents and calamities strike.
1. General liability insurance
Although not legally required, general liability insurance is one of the most important coverages to have because of the kind of protection it offers. Also called business liability or public liability insurance, it covers your business financially against claims of bodily injury and property damage resulting from your day-to-day operations.
General liability policies may provide coverage for copyright infringement and incidents that cause reputational harm including libel, slander, and invasion of privacy.
Most policies also offer product liability coverage, which protects your business from lawsuits claiming injury or losses because of a product you sell or make.
2. Commercial property insurance
Commercial property insurance helps minimize the financial impact of the damage natural and man-made disasters cause to your business’ on-site physical assets. These include:
- Property or building your business operates in
- Equipment and technology your business uses
- Inventory of products and materials your company stores and sells
Commercial property coverage lessens the disruption of unexpected incidents to your daily operations by providing compensation for the damages and losses. Some policies also pay out a part of lost income if the damage keeps your business from conducting its usual operations. Although not mandatory, this type of business insurance is often a requirement in commercial leasing arrangements.
Commercial property insurance is typically bundled with general liability insurance in a business owner’s policy (BOP), which is a form of small business insurance. Some BOPs also include business interruption coverage.
3. Workers’ compensation insurance
Workers’ compensation insurance protects your business from the financial liability of having to pay for costs resulting from job-related injuries and illnesses. Almost all states in the US require businesses with a certain number of employees to take out this type of coverage.
As a business owner, you are responsible for shouldering the entire cost of coverage. You cannot require your employees to contribute to the premiums. You can click on the link to find out how workers comp is calculated.
Workers’ compensation insurance also follows a no-fault system. This means the benefit an employee receives is not impacted by their or your business’ negligence, although there are certain situations that can lead to workers comp claims being denied.
4. Commercial vehicle insurance
Commercial vehicle insurance is one of several types of business insurance policies that are legally required. This form of coverage works similarly to private auto insurance, but with one major difference: it covers mainly company cars and commercial trucks and vans.
5. Health insurance
If your business employs more than 50 full-time staff, you are required to take out health insurance for your workers under the Affordable Care Act (ACA). If you have less than 50 workers, you can access Small Business Health Options Program (SHOP) instead.
Health insurance is designed to help offset the costs of medical treatment by covering a portion of the professional and hospital fees incurred. According to the latest employee health benefits survey by health policy focused non-profit KFF, US companies pay about 83% of their employees’ total health insurance cost for single coverage and 72% for family coverage. These are estimated at $7,911 and $22,463 per year, respectively.5. Health insurance
If your business employs more than 50 full-time staff, you are required to take out health insurance for your workers under the Affordable Care Act (ACA). If you have less than 50 workers, you can access Small Business Health Options Program (SHOP) instead.
Health insurance is designed to help offset the costs of medical treatment by covering a portion of the professional and hospital fees incurred. According to the latest employee health benefits survey by health policy focused non-profit KFF, US companies pay about 83% of their employees’ total health insurance cost for single coverage and 72% for family coverage. These are estimated at $7,911 and $22,463 per year, respectively.
6. Professional liability insurance
Although not always legally required, professional liability insurance is one of the several types of business insurance policies that are essential for companies offering expert or advisory services.
A professional liability policy protects your business against claims of financial losses resulting from alleged or actual negligence during the fulfillment of a professional service. It covers legal and settlement costs arising from the following:
- Service-related mistakes and oversights
- Inaccurate advice
- Misrepresentation
- Breach of contract
- Unfinished work
- Budget overruns
- Personal injury, including libel and slander
What are the benefits of having these types of business insurance?
In your day-to-day operations, your business may face situations that can adversely affect your profitability. Mistakes can lead to costly lawsuits, while accidents and calamities can take a huge chunk out of your revenue. Having the right types of business insurance policies can help provide the financial protection you need when unexpected disasters strike.
Another benefit of carrying the right types of business insurance is that it boosts your company’s credibility. The reason is that many stakeholders and clients prefer working with businesses that they know are financially protected.
Taking out coverage, however, is just one aspect of how you can minimize your business’ losses. Pairing the correct insurance policies with sound risk management practices is often the best way you can protect your business’ assets and finances.