If you own a business you probably have asked yourself the question, how much business insurance do I need? Too much coverage is a waste of money and too little coverage can lead to financial disaster. The amount of business insurance you need depends on what type of business you own and how many employees you have.
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Insurance companies categorize businesses based on risk and the number of employees being put at risk. The following article provides additional information about business insurance, the types available, and how to find the right company.
Property Insurance Coverage
The first type of business insurance that all businesses with an office building or space need is property insurance coverage. If your business is run and operated out of your home, then you may not need this type of coverage because it may be covered through your homeowners policy. However, home insurance will NOT cover all your needs. Property insurance covers damage done to your business property or personal property of employees that is on business property (such as personal vehicles, purses, electronics, computers, etc.).
Property coverage also includes damage done to your business because of a fire or a natural disaster such as a earthquake. Hurricane insurance and flood damage insurance are separate policies that must be added to a traditional property insurance policy in order to be covered. There are many riders or additional coverage options that can be added to a policy to make sure items specific to your business are covered. As your business grows, you may want to consider adding some of these additional coverages to further protect the assets of your growing business:
- Debris removal- Often times after a windstorm, hailstorm, fire, hurricane, or flood there is a lot of debris left behind. Removing debris can be costly and time consuming. Debris removal insurance is an additional type of coverage you can add to your existing policy that covers the cost of debris removal in these situations.
- Builder’s risk- If your building is under construction, you can carry builder’s risk insurance until the building is complete and a traditional property insurance policy takes affect. You can also add glass insurance which covers broken windows or glass due to vandalism, storm damage, or accidental breakage.
- Inland marine- The title “inland marine insurance” may sound confusing but it is just an extra policy that covers damage done to other people’s property that you are transporting or that is left on your premises. For example, if you own a jewelry store, inland marine insurance would cover the cost of customer’s jewelry that is left for sizing or repair, should something happen to the items.
- Business interruption insurance will cover expenses, salaries, and lost income that may occur while you are fixing a property damage issue. The time frame that will be covered is pre-determined when purchasing the policy.
Liability and Workers’ Compensation Insurance
Basic business liability insurance will cover injuries that happen at your business to someone else. When this happens, individuals often want to sue the business for lost wages, medical bills, and even emotional stress. Your business can be ruined financially, if you do not carry liability insurance.
Liability insurance will protect your business assets as well as your personal assets. Types of liability insurance include:
- Auto insurance
- Malpractice insurance (this is for more than just doctors)
- Directors and officers insurance
- Errors and omissions insurance
The main purpose of liability insurance is to protect you in the case of a lawsuit.
Workers’ compensation insurance is meant to cover your employees when they are injured on the job. Employee safety should be a top priority in any business, but accidents and injuries still happen. To protect your business from lawsuits and to retain your employees, having a workers’ compensation insurance plan is crucial. Having this type of policy will, by law, restrict many types of lawsuits that can be brought against a business for negligence.
Finding the Right Business Insurance
The right business insurance for your business will depend on what you sell, how you sell it, where your business is located, and how many employees you have. However, going without business insurance is a sure way to face legal problems in the future. Start looking for the company and policy that is right for you by using an online comparison tool. This type of tool allows you to compare what several business insurance companies have to offer and make a decision for your business.
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