No matter the size or nature of your business, one thing that remains the same is the need for business insurance. There are many different aspects of your business that you'll want to take into consideration when looking for new business insurance – or reviewing your current insurance coverage. Since every business is different, each one will have different insurance requirements. For example, a company that produces physical goods may need different insurance than a company which offers services. In either scenario, there are some similarities, and listed here are a few types of insurance that all businesses should consider.
Workers' Compensation Insurance – for your employees
Workers' Comp insurance is required by law in almost every state. It can provide coverage for medical costs and a portion of lost wages for an employee who becomes injured or ill on the job. Typically, this type of insurance only covers injuries or illness that occur on the job site – for example, if an employee slips and falls on a wet floor.
Since the laws regarding Workers' Comp can be different depending on where your company is located, it's important to work with an insurance professional to make sure you're getting the coverage that's required, as well as what you need for your particular business.
General Liability Insurance
General Liability Insurance is designed to protect you and your business from a variety of claims, including accidents, injuries, or claims of negligence. This type of insurance can help pay for things like property damage, medical expenses, libel, slander, legal costs, and faulty products. No one expects to get sued, but the reality is that it's always a possibility. You don't want to leave your business open to these types of situations, and the broader the protection, the better.
Professional Liability Insurance – "Errors and Omissions" coverage
Professional Liability Insurance can also be known as "Errors and Omissions Insurance," or "Malpractice Insurance." It protects you from lawsuits that allege negligence in providing professional services, providing shoddy work, or making mistakes or omissions. This type of insurance is particularly important if you have a service-based business, but can also be necessary for other types of businesses as well. Mistakes happen – so adequate Professional Liability Insurance can be helpful, even if you don't think you'll need it.
The definition of "property" is broad, and can mean different things to different types of businesses. That's why it's important to make sure you carry adequate Commercial Property Insurance. Without this type of insurance, most small businesses wouldn't be able to replace their equipment should something happen to cause damage or destruction. Property covered by this type of insurance can include buildings, computers, inventory, supplies and equipment. There are two types of Property Insurance: "all-risk" policies cover just about everything, and is a good way to avoid duplication or overlap of coverage, as well as gaps in trying to cover your liabilities. "Peril-specific" policies, or "named-peril" coverage applies only to particular perils that are specifically named in the policy. They're usually needed when there is a high risk in a very particular area.
Life Insurance / Key Executive Insurance – protection and benefit
Offering life insurance for employees can be a valuable benefit when trying to attract high-quality employees. A business can even offer additional coverage for executives. These employees are deemed to be crucial to the running and success of the business, and may sometimes require additional insurance, above and beyond what the normal employee benefits provide. This can be another benefit in attracting top talent.
A business can also offer special "Key Person" policies for employees without whom the business could not function. Key Person Insurance protects against a key employee's unexpected death – often times the benefit amount equals the expected revenue loss and costs required to find and train a suitable replacement. The business pays the premiums, and the insurance is considered a business asset.
It's possible to combine some of these basic coverages as a package policy, often referred to as a Business Owner's Policy, or BOP. Many insurance companies bundle certain coverages, and this can save you money, as long as you make sure you get the proper type of coverage.
Even if you feel you have adequate business insurance coverage that meets all your current needs, it's still advisable to review all your coverage on an annual basis, to make sure that your coverage continues to provide everything that you need. This is particularly important if you or your business have experienced any major changes, such as change in family status, or a significant increase or decrease in business activity. Additionally, be sure to work with a reputable, licensed insurance agent or broker, who has knowledge regarding business like yours.