Being an entrepreneur or a small business owner can be hard work, and often comes with everyday risks while running a company. Even before you begin to hire employees, there are risks so it is more important than ever to have the right insurance policies in place to safeguard and protect your business. It doesn’t matter how experienced you are, accidents and mistakes can and do happen in the workplace. One expensive claim or even an unexpected accident occurring can cause a lot of financial worry and loss to a small business owner. Many business owners see insurance as a luxury and not a necessity. With the day-to-day running costs for a business, it is important to protect every potential investment and the potential loss in the future. Here are some of the different types of insurance for businesses.
Potential risks a business can face
Every business is different and not all face the same risks. Here are some of the common risks a business can face.
Property Risk
Property such as inventory, building, equipment, and vehicles are often your most valuably owned assets to your business. Any damage done to your property can pose a significant risk to your business. Replacing and repairing your property can be expensive leaving you in a tough position not being able to run your operation.
Business Liability Risk
Whether it’s your creditors, employees, customers, or third-party members, your relationship with any member can become an issue which at some stage could leave you in a tough legal situation. Finance for legal claims can put a drain on the finance of your business. Protecting your business from potential claims is an important step for a business owner.
Cyber Risks
Cybercriminals are on the rise and increasingly target small businesses that may store valuable client information. A data breach and cyber-attack can be financially devastating and could possibly ruin your reputation.
Business Interruption Risks
Many unexpected incidents, such as a fire or flood damage could force you to close your business on a temporary basis. Even if you have money to cover the costs of the damage, it will still take some time to get back on track. Therefore, it is crucial to have the right insurance policies in place to cover the potential losses of the business and always protect your business.
Types of Insurance Policies
Businesses have access to a wide range of insurance policies to protect their business against any potential risks. While there are many types of insurance, here are some of the many common policies that you need to be aware of.
Public Liability Insurance
Public liability cover is one of the most important insurance types if you are involved with the general public on a day-to-day basis. Public liability insurance will protect your business in the event a member of the public is injured or suffers property damage due to your business proven negligence. Public liability insurance means you won’t have to worry about the potential cost of paying huge sums for accidents on your commercial property.
Commercial Property Insurance
Whether a business leases or owns a premises, commercial property insurance is a must. This insurance type covers furniture, equipment, inventory, and signage in the event of a storm, theft, or a fire. Mass destruction events such as earthquakes and flooding are generally not covered under this policy.
Product Liability Insurance
If your business manufactures products and sells to the general public, then product liability is essential to have. It is important to take every step possible to ensure all products are safe and you do not find your business involved in a legal case due to damages caused by your product. This policy and cover can be tailored to your specific products.
Business Interruption Insurance
When a business operation suffers a crisis that leaves it unable to operate for a period of time, this can be catastrophic. During this time, your staff may not be able to work or manufacture products which in turn, causes a loss of income for your business. This type of insurance is ideal for businesses such as retail that require a physical shop and location. Having a business interruption insurance policy in place will save and protect your company from a lot of financial loss.
Workers Compensation Insurance
Worker’s compensation insurance provides your employees with benefits if they get injured or sick from their job. This policy will cover disability, death, and medical treatment. Even if your employees are working in a low-risk environment, accidents or medical conditions do occur which could result in an expensive claim made against you.
Whatever type of business you own, getting the right business insurance policy in place is a must. It gives a startup business a good foundation when you open the doors for the first time. Your policy may change over time so this should be discussed with your insurance provider.