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Even though people start a business to make money, there are, unfortunately, many ways to lose money as well. One way to protect all the hard work you have put into your business is to look at business insurance.
Business insurance can protect you against any loss that is incurred while running your business.
Common reasons that businesses need insurance are that a customer or an employee makes a claim against you, or that your business equipment or place of business is damaged. Or sometimes there is a defect in a product or a service you offer causes a loss for a customer.
All these things are a reality of doing business, and you must be prepared for them.
You’ll often hear the words ‘commercial insurance’ and ‘business insurance’ used to describe Employers’ Liability Insurance and General Liability insurance. These are the two most common types of business insurance.
However, there are other types of business insurance available. Each type covers a slightly different aspect of running a business.
Here are seven types of business insurance that you should be aware of are when running a company:
1) General Liability Insurance
This type of business insurance is for injured customers or any damage to their damaged property. For example, if a client slips and falls at your business, or you accidentally damage something of theirs while you’re working, this insurance will cover the claim and legal fees.
2) Employers’ Liability Insurance
If your business has employees, you’re legally required to have this type of business insurance. This includes all types of employees: including temps, part-time or full-time. Employer’s Liability Insurance helps cover claims made against you if an employee is injured or gets ill while working for you. Employers Liability Insurance is usually packaged with Workers Compensation and protects the employer if a worker is not covered by workers’ compensation or if they decide to sue the employer.
3) Product Liability Insurance
Product liability insurance covers the effectiveness of any products you supply. One key point is to remember that you don’t have to be the manufacturer of the actual product to be liable for damages.
If a company or individual has suffered damage or injury because of a product you designed, repaired, or provided, then this business insurance policy will compensate them.
4) Professional Insurance (Errors & Omissions)
This type of business insurance is for a client’s lost sales or damaged reputation due to the actions of another business.
Professional Insurance (Errors & Omissions) is for businesses that offer knowledge, skills, or advice as part of their work, such as consultants, advisors, etc. If the work of your company leads to a client’s loss of sales or damaged reputation, then professional indemnity insurance can help cover the cost of legal fees and claims.
5) Business Interruption Insurance
Business Interruption Insurance will keep the finances of your company running when your business isn’t operating. A business interruption insurance policy will cover you for loss of sales and profits during a period that you’re unable to work due to unforeseen circumstances (e.g., floods or fires.)
6) Business Property Coverage
This type of insurance for business covers the physical contents of your business. These are the physical items that make your business run: computers, mechanical equipment, tools, machines, and stock.
7) Key-Man Insurance
Key man insurance is essentially a life insurance policy for the key person in a business. If that person unexpectedly dies or is unable to work any longer, then the company receives the insurance payoff. If there are specific people in your company who are essential to keep the business going, you can insure them.
Finding the Best Business Insurance Policy
Getting the best business insurance policy for your business isn’t just about finding the cheapest option.
It’s about finding the right business insurance package at the right price. And as each policy is different, it’s essential to know what’s covered by your business insurance so you can fill in any gaps.
When you review each of these different types of business insurance, it can feel overwhelming to know which ones you need. The good news is, we’re here to help.