It would not be an exaggeration to state that there aren't many things in life that are as risky as starting and running a business
. Even if a person operates in the safest low-risk industry, purchasing an appropriate insurance policy is still an important requirement. A risk does not require an introduction and neither does the fact that it can ruin a business and everything related to it.
The business might not be prone to any major risks of the industry, but some other risk-governing factors are omnipresent. Protecting a small business from financial damage will not only preserve the hard work and long hours spent in setting up a business, but will also provide a better and peaceful night’s sleep to the owner.
Being savvy about business insurance can help in saving money as well as ensuring the protection that the business needs over the period of time. For improving the insurance acumen of small business owners, here is a primer on some of the most common types of business coverage that can be easily tailored to fit the needs and requirements of the business, as well as its operations.
General liability insurance
Every small business, even a home-based entity, should have proper liability insurance. This type of business coverage provides for the legal defense as well as damages in case the owner, the employees or the products ever cause or are assumed to cause any kind of property damage or bodily injury to the final users.
Professional liability insurance
This insurance policy is also known as errors and omissions insurance. The policy covers the defense and damages for the complete failure or mistakes in rendering the professional services. It is applicable for the professional service firms, including accountants, lawyers, real estate agents, insurance agents, consultants and other similar ones.
If a business is operated from a personally owned property, including the office setup, equipment, inventory or useful tools, having property insurance
becomes vital. The policy protects the owners from all kinds of unwanted perils, including theft, fire, vandalism or smoke damage.
Business interruption insurance
A business interruption policy is also one of the primary types of insurance coverage that protect the earnings and covers the losses suffered during the periods of non-operation. The policy is generally purchased as a part of the property insurance or the business owner’s policy and includes the reimbursement of utility, water and other expenses that continue to generate even during the days when the business is not operating.
Worker’s compensation insurance
This insurance policy provides coverage against the medical expenses and wage replacement of those employees who are injured while working. In exchange for these monetary benefits, the employees generally agree to give up their power to sue the employer for any harmful incident that may occur at the workplace. With the power to deal with business owner protection and legal complications, this is a must-have insurance policy for every small business.
Each and every insurance policy can be easily tailored to fit the needs and requirements of a business. For those who are familiar with the insurance sector, choosing an appropriate policy wouldn't be a big deal. However, it can be quite a confusing endeavor for those unfamiliar with the industry. Therefore, it is always considered wise to have a word with a reliable insurance agent for determining the best coverage for one’s small business.
See also: Two types of liability insurance your practice needs (and likely lacks)