There are a lot of responsibilities when you run a business. When you first dream of a startup, you think of your great ideas and how you will make the business work. There’s a good chance you didn’t think about insurance. It’s one of the most important aspects of being an entrepreneur; unfortunately, it is often overlooked.
There is no good reason to try and cut corners regarding insurance for your business. For one, businesses are sued every day, and whether or not you did something wrong, it can cost you dearly. Lawsuits tend to drag on for years, and in all that time, you will have to pay out for legal fees and any other associated costs. Secondly, there is peace of mind that comes with being protected. If you aren’t, it will only add another layer of stress and concern to being a business owner, which is already stressful enough. Finally, knowing what kind of coverage you need and how it might apply is important. Here are the basics of business insurance.
General Liability Insurance
If you are one of the many businesses that get sued yearly, you will be glad to have general liability insurance. It protects you from the costs of most lawsuits, including any final payout amounts. In addition, this type of coverage will compensate you in situations related to injuries your business is accused of causing or from property damage. You can run a tight ship, but there is always the chance of a bizarre accident occurring or just human nature causing issues.
General liability will also protect against accusations of slander or libel. If you say or write something about another entity and they take exception, you could find yourself in court. We also live in an increasingly digital world. Very few businesses now do not store client information on hard drives or in the cloud. A data breach could lead to significant losses for your clients, who may decide to sue. General liability can also protect you against that situation by providing compensation to any victims.
Workers Compensation Insurance
If you are hiring workers, you must purchase workers’ compensation insurance. There is always a chance that someone will get hurt on the job, no matter what job type. While it’s true that some professions are more dangerous than others, there is a risk for any job. For example, sitting at a desk all day can cause repetitive strain injuries that will harm their quality of life and potentially make it impossible for them to work.
Workers’ compensation covers you by compensating injured workers for the costs they incur related to the injury. This includes medical bills, lost wages, rehabilitation costs, medications, and bill payments. Not only is workers’ comp important to protect you, but in all states, it is the law. Therefore, you must have it in place if you have any employees. Otherwise, you could face legal penalties and even lawsuits.
Professional Liability Coverage
There may come a time when a mistake by your business causes losses for a client. For example, if you have an architectural firm, there is a chance that you could design a building with inappropriate materials for the job. Say you are designing a music hall. If you don’t have the exact current materials for making the walls of the hall, then it could affect the quality of the sound. If that happens, you could face lawsuits from the owner since you will have effectively ruined their business prospects. Professional liability will provide compensation to make up for their losses and other costs associated with your errors.
Commercial Vehicle Insurance
If you use a car for your business, then there is a good chance that you will need auto insurance for it. Even if it is your personal car, your personal policy might not cover you. The last thing you want is to be left holding the bag if you get in an accident while performing duties related to your business.
For instance, while using a car as a real estate agent may not pose an additional risk, using it to transport equipment or inventory certainly will. In those cases, you will need additional coverage to make sure you are protected. When looking them over, always compare business insurance policies to see what type of vehicle coverage you have. Most business owners’ policies do have it, but you should always make sure.
Commercial Property Insurance
Commercial property insurance will protect property that is owned and used by your business. This can include your location, equipment, inventory, and external property. Your property has many potential risks, such as theft, vandalism, water damage, fire, and other natural disasters. If you aren’t covered, you may have to pay out of pocket for replacing or repairing anything affected by an incident.
If you work from home, then you probably have a personal homeowner’s policy. However, just like with auto insurance, you might not be covered under that policy for the business-related property. Your computer, inventory, and even the office where you do business, maybe left uncovered if you experience damage to your home. Many commercial property policies can also provide you with business interruption insurance. This will help keep money flowing if you have to shut down your business due to a covered risk. Then you can hit the ground running when everything is ready to go again. Always make sure that you have the appropriate protection; otherwise, you could find yourself in deep financial trouble.
Never assume that you don’t need protection from risk. Even if you have very strict safety standards, or if you are a one-person shop operating from your couch, there is always the chance of something happening. The best thing is to have insurance and then never need it. However, if you do need it and don’t have it, the consequences could ruin your business. Therefore, you must have the coverage you need to ensure that you minimize the financial fallout from negative incidents that might befall your company. You’ve worked hard to make sure that your business is successful. Ensure that you don’t lose it all in one fell swoop by calling the state farm toll-free number to learn how they can protect your business.