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For the small business owner, choosing the right insurance is vital.
Buying up every different type of insurance plan out there is not cost-effective, it’s impractical and, in all likelihood, will have you doubling up on certain types of coverage.
Not having enough coverage is likely to bankrupt you. Here are five essential types of insurance that should keep you covered.
1. Business Owners Policy Insurance
First on our list is BOP insurance. This is an absolute must as it alleviates the time consuming process of searching out for every essential piece of coverage that you need. Business owners policy insurance is designed with small businesses in mind.
To qualify, you have to have fewer than 100 employees and less than $1 million in revenue. Should you exceed these figures you will find that you will have to start looking for separate insurance.
The beauty of BOP insurance is that there are customizable bundles designed for what you require. So all the types of insurance you may have seen on lists similar to this are packed up under one policy. Most packages include:
- Property Insurance
- Medical Payment Insurance
- Equipment Breakdown Insurance
- Employment Practices Liability Insurance
- Loss of Income insurance
- General Liability Insurance
- Data Breach Insurance
Of course, some of these might not be relevant to you or there may be other types of insurances that you can add on to the policy. But it seems clear that business owners policy insurance is an absolute must have.
2. Commercial Auto Insurance
If your business depends on vehicles then this also is a must (and rarely covered by BOP insurance). Similar to personal auto insurance, commercial auto insurance covers you for bodily injury, property damage, medical payments, physical damage to name but a few. The difference between personal and commercial policies include things like eligibility, exclusions and limits. Put simply, the risks are too high to be relying on your personal auto insurance for comprehensive cover.
3. Worker’s Compensation Insurance
As an employer, you are legally obligated to ensure the wellbeing of your employees. If, in the event of an accident, you are not covered you could find yourself liable for thousands possibly millions of dollars. Unfortunately, accidents can happen and it is vital that both employer and employee are protected.
For the employee, workers compensation insurance will make sure that medical bills are covered and that they are appropriately compensated for loss of earnings. In terms of the employer, workers compensation helps ensure that they are protected from lawsuits by the victim. It is worth noting that workers compensation insurance differs slightly from state to state, so be sure you know the systems in place relevant to where your business resides.
4. Professional Liability Insurance
Professional liability insurance is another key insurance to have on your list. There may come a time (and it’s very likely to happen) that a client is unsatisfied with the services that you have provided them or you may receive threats of lawsuits from companies in a similar field. As a small business owner, you are protected by any claims, alleged or otherwise, of professional malpractice. Coverage includes things like possible negligence, defense costs, copyright infringement or claims made by temporary staff and independent contractors.
5. Personal Life Insurance
You may be wondering how this might link to your business but a personal life policy protects your assets and business property If the business is then passed on to someone else. It also allows for a smooth transition of the business to be passed on from you to your business partner or whoever you wish to take your place. It isn’t something that any of us like to think about but without any personal life insurance, there may not be any income to ensure that the operation of your business continues.
At the end of the day, not having a fully comprehensive list of coverage puts you, your employees and your family at risk. With these five insurance types you can be sure that you are covered for virtually every eventuality.