So you started your business. Have you seen a hole in the market or have come up with a bright new idea. You have things going on and maybe you have even started making some money. Well, before you take it a step further, it’s time to think about insurance for your business. After all, you’ve taken a big risk starting your business and that means you need to mitigate those risks as best you can.
The uncompromising fact about coverage and business is that you need it. Everything you have for your business, from vehicles to basic liability, requires insurance. Without it, you could jeopardize everything you’ve built, open yourself up to crippling financial problems, or even break the law. But don’t worry, here are some basics of covering your business that can help you get the protection you need to be successful.
Types of business insurance
The first thing you need to understand about coverage and your business are the different types that exist. Depending on your business, you may need specific types of insurance. Generally, corporate coverage can be divided into three broad categories: insurance for owners or key partners and employees, corporate and property earnings coverage, and liability insurance. Here is a breakdown of each different type.
Insurance for business owners, partners and key employees
If you own a business, you need specific types of coverage depending on how your business is organized. These may include, but are not limited to:
• Life Insurance: This coverage protects your family if something happens to you. If you are the sole owner of your business, this insurance is crucial because business owners are personally liable for all of the company’s debts.
• Disability Insurance – In the event of an injury or illness, disability insurance will provide you with income for a specified period of time.
• Partnership Insurance or Trade Coverage – If you have a partner in your business, this insurance will help you buy your partner’s stock and continue running the business in the event of your death.
• Critical Illness Insurance – If you become seriously ill, this coverage will give you a lump sum of money to help you get through the situation.
• Key People Insurance – This coverage protects you in the event of the death or loss of those employees who are most important to your business.
Business and real estate earnings insurance
In addition to coverage that protects people, your business may also require the following types of insurance to protect its assets and earnings. Keep in mind that companies that sell out your home may require coverage beyond your home insurance. It is always a good idea to contact the roofing company to discuss running an out-of-home business.
• Property Insurance: This coverage covers any building or property owned by your company if it suffers damage or destruction due to fire, earthquake, avalanche and other similar disasters.
• Content Insurance: If you own a property or building that stores items for your business, such as a warehouse or shop window, this policy covers the loss of that content. Keep in mind that even if you are renting a space, you may still need content insurance as your lease agreement will likely make you responsible for what you put inside the rented space. Home business owners will need to contact their insurance companies to discuss what needs to be included in their home policy.
• Business Interruption Insurance: In the event of a disaster, this policy will cover you for as long as your business cannot function properly.
• Vehicle Insurance – If your company owns vehicles, you are legally required to have coverage. If you use your own vehicle for your business, be sure to contact your insurance company.
Liability covers you in the event of an error or accident for which you can be held responsible. There are three types to consider when owning a business: personal liability, product liability, and professional liability. These cover you from personal liability, something wrong with your products, and lawsuits filed by your customers respectively.
Starting your own business is a big risk, but that doesn’t mean you should take unnecessary risks. If you own a business, you need the right coverage. Make sure you shop around and find the right insurance package for your business. If you have any further questions, we can help you make sense of your policies to make sure you have the right type of coverage from the right types of insurance companies.