Types of Business Insurance and Their Need
No matter the size or nature of your business, the need for business insurance remains the same. When looking for new business insurance or reviewing your current policy, there are many different aspects of your business to consider. Every business is different, and so are the insurance requirements. For example, a business that produces physical goods may have different insurance requirements than a business that provides services. There are some similarities in these scenarios and the types of insurance that all businesses should consider are listed below.
Workers’ Compensation Insurance – for workers
Workers’ compensation insurance is a legal requirement in almost every state. It can cover medical expenses and a portion of lost work for employees who are injured or become ill on the job. Normally, this type of insurance only covers workplace injuries and illnesses, such as if a worker slips and falls on a wet floor.
Workers’ Comp legislation varies depending on the location of the business. Therefore, it is important to work with an insurance professional to obtain the coverage required for your specific business.
General Liability Insurance
General liability insurance is designed to protect you and your business from a number of claims, including accident, injury and negligence claims. This type of insurance can cover property damage, medical bills, defamation, legal fees, and defective products. No one expects to be sued, but in reality, it can still happen. To avoid this, you need more comprehensive coverage.
Professional liability insurance – errors and omissions coverage
Professional liability insurance is also called “errors and omissions insurance” or “malpractice insurance. It protects clients against legal action for negligence, poor performance, error, or omission in the provision of professional services. This type of insurance is especially important if you work in the service industry, but may be necessary in other industries as well. Mistakes do happen. Even if you don’t think you need it, appropriate professional liability insurance can be helpful.
The definition of “property” is broad and can mean different things to different types of businesses. Therefore, it is important to have appropriate commercial property insurance in place. Without this type of insurance, most small businesses would not be able to replace their equipment if it was damaged or destroyed by an accident. The insured property includes buildings, computers, warehouses, materials, and equipment. There are two types of property insurance. “All risk” insurance covers almost everything and is an effective way to avoid double insurance or gaps in coverage. “Risk-specific” or “named-peril” insurance covers only certain types of damage specifically mentioned in the policy. It is usually required when there is a high risk in a very specific area.
Life insurance/management – coverage and benefits
Providing life insurance to workers can be a valuable asset in attracting top talent. Some companies offer additional coverage for managers. These employees are critical to the operation and success of the company and sometimes need additional insurance coverage beyond the normal benefits offered to employees. This can also be an advantage in attracting top talent.
Companies can also offer special “key man” insurance for employees without whom business operations would not be possible. Keyman insurance covers the unexpected death of a key employee and, in many cases, the amount of compensation is the expected loss of income and the cost of finding and training a suitable replacement. The premiums are paid by the company and the insurance is. Considered an asset of the company.
It is possible to bundle some of these basic coverages into a comprehensive policy, often called business owner’s insurance or BOP. Many insurers bundle certain coverages together and this can save you money if you make sure you get the right type of coverage.
Even if you think you have adequate business insurance covering all of your current needs. It’s a good idea to review all of your insurance policies once a year. To make sure they all continue to provide what you need. This is especially important if you or your business has undergone any significant changes. Such as a change in marital status or a significant increase or decrease in business. Also, make sure you are working with a serious, licensed insurance agent. Or broker who is familiar with businesses similar to yours.
Lily Poole is a Property and Home Insurance officer by profession. She is pretty well experienced in the NYC Business insurance and accounting field. She has an impressive profile in the training and development industry.