Your business insurance policy can protect you from losses due to unforeseen events, such as a compensation claim. It can also help minimize the impact of lawsuits and other legal proceedings on your business. There are different types of insurance coverage available for business, such as legal liability, employer’s liability, property damage, professional indemnity, and worker-related risks insurance.
Choosing the right insurance for your business not only will help to protect it, but also your income and your customers. It is also possible to find tailored coverage to suit your business size scale and the industry it operates in. Whether you are the director of a massive agency with several office branches, the founder of a start-up company in the technology field, or a sole trader who mainly works from home, it will be beneficial to learn about this specific type of insurance to determine the most suitable one for your business.
The Reason and Purpose to Get Commercial Insurance
There is no possible way to predict what may potentially happen in the upcoming future. Of course, it’d be great if you have a way to tell the occurrence of lawsuits, natural disasters, or work-related injuries, but really, it is simply not possible to guarantee such things will not happen. This alone is the best reason to get insurance.
The purpose of getting business insurance is to protect your valuable company from damage and expenses that can impact its operations significantly. For example, if the building of your company catches fire or if there’s a slip and fall incident that cause substantial bodily injury at your daycare business. These events may lead to major costs. It is especially risky for smaller businesses to not be covered by insurance, as they can cause bankruptcy.
This is why most insurance policies for businesses offer deductible as well, such as business insurance GEICO. For example, if a business purchases comprehensive coverage for its transportation vehicle that contains physical damage coverage, then the deductible will include the glass repairing cost as well, even though it is the windshield of the truck that’s damaged.
Types of Commercial Insurance
There are various types of business insurance available out there. It can be quite overwhelming to select one to purchase, considering the vast amount of business insurance services, but here are four of the most common types of insurance obtained by companies:
- General Liability Insurance (GLI)
This insurance protects your business from different types of claims it is subjected to, such as personal injury, bodily injury to external parties, property damage to external parties, and more.
- Commercial Property Insurance
The next insurance type offers protections for rented or owned equipment and building used to operate the business. However, note that this insurance typically won’t cover damages caused by natural disaster, so you should expect to purchase separate policies such as earthquake insurance to provide further protection for your business.
- Business Income Insurance
Also commonly referred as business interruption insurance, it helps to replace the lost income due to covered property damage that causes business to fail to operate. This coverage can be used to support ongoing expenses payment, such as utility bills, rent, or payroll.
- Professional Liability Insurance
This particular business insurance type provides coverage from legal cases that claim your business made mistakes when providing services. It is typically called errors and omissions (E&O) insurance as well.
- Workers’ Compensation Insurance
This insurance ensures benefits for employees if they get sick or hurt due to their job. Some examples of the benefits provided by this insurance are medical bill payment, funeral costs coverage, lost wages replacement during the recovery process, ongoing care bills such as physical therapy. The workers’ compensation insurance is mandated in the majority of the states in the USA. If your company doesn’t comply with the state’s law, then there’s a possibility it will face penalties, fines, or criminal charges.
Regardless of what your business provides or where it is going, it is important to make sure that you get suitable types of business insurance. For smaller businesses and start-up companies, this can establish a good foundation when stepping into the industry. It also offers beyond protection for well-establish business, which is to display to the contractors and consumers that your company takes risk management seriously.
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