From the day you start your business, you expose yourself to certain risks. One lawsuit or catastrophe could wipe out a small business before it even has a chance to get off the ground. Even before the first employee is hired, a business is at risk, making it crucial to have the right insurance in place.
Fortunately, businesses have access to a wide range of insurance types to protect them against these dangers. Here are some insurance types that a business must have in place as soon as possible.
Whether a business owns or leases its space, property insurance is a must. This insurance covers equipment, signage, inventory and furniture in the event of a loss. Note that mass-destruction events, like flood, are generally not covered under standard property insurance policies. Chat with your trusted agent regarding your risk for a mass-destruction event and the cost for a separate policy to cover your property.
Workers’ compensation insurance.
Once the first employee has been hired, workers’ compensation insurance should be added to a business’s insurance policy. This will cover medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business. Even if employees are performing seemingly low-risk work, slip-and-fall injuries or medical conditions such as carpal tunnel syndrome could result in a pricey claim. Even in a monopolistic State like North Dakota it’s important to consult with your agent to avoid gaps and traps in coverage.
Product liability insurance.
If your business manufactures products for sale on the general market, product liability insurance is a must. Even a business that takes every measure possible to make sure its products are safe can find itself named in a lawsuit due to damages caused by one of its products. Product liability insurance works to protect a business in such a case, with coverage available to be tailored specifically to a specific type of product.
Business interruption insurance.
If a disaster or catastrophic event does occur, a business’s operations will likely be interrupted. During this time, your business will suffer from lost income due to your staff’s inability to work in the office, manufacture products or make sales calls. This type of insurance is especially applicable to companies that require a physical location to do business, such as retail stores. Business interruption insurance compensates a business for its lost income during these events.
By having the right insurance in place, a business can avoid a major financial loss due to a lawsuit or catastrophic event. Check with your trusted agent to find out how much money you would need and for how long.
Many professionals begin their small businesses in their own homes. Unfortunately, homeowner’s policies don’t cover home-based businesses in the way commercial property insurance does. If you’re operating your business out of your home, ask your agent for additional insurance to cover your equipment and inventory in the event of a problem.
If company vehicles will be used, those vehicles should be fully insured to protect your businesses. At the very least, businesses should insure against third-party injury. Your agent can also get a price to coverage physical damage on newer or more valuable vehicles. Employees that are using their own cars for business and are delivering goods or services for a fee will NOT have coverage under their personal auto insurance policy.
We’ve mentioned third party coverage because it is included with your primary package to cover liabilities that arise in the course of business operations either on premises or when an employee leaves the premises in a company vehicle. But do you have enough coverage? When you consider the potential cost of a wrongful death lawsuit or a total property loss caused by negligence of a business’s employee or product the answer is “no”… unless you have a Business Umbrella which provides additional third party liability coverage above and beyond the limits on your underlying insurance policies. Your trusted agent should be offering Business Umbrella quotes and helping your business balance the cost of the this insurance with the benefit of the protection it offers.