Whether youâ€™re a small business owner or a large corporation, there are many reasons you need business insurance. Business insurance covers necessities such as general liability, product liability, and professional liability. As a business owner, it is also important to consider commercial property insurance or home-based business insurance as needed.
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When you establish a business as a Limited Liability Corporation (LLC) or a regular corporation, your personal assets are generally safe from lawsuits. However, the assets of your business are at great risk if you do not have business insurance.
In addition to liability insurance you need to review the legalities of purchasing state required insurance to cover workerâ€™s compensation, unemployment, and disability insurance for your employees. You can also buy insurance to cover your business in the event you have operating losses. Some types of business insurance may actually be required by investors or the bank if you do not own your business outright.
Liability Business Insurance
Liability is one of the greatest risks a business faces, especially in a country that is statistically known for its quick call to action for lawsuits. There are many incidents that can lead to liability lawsuits, regardless of how many safety precautions you take. Therefore, you should always include business liability as part of your business protection plan.
- General liability covers general incidents, such as injury and medical expenses that result from accidents, such as someone falling in your store due to a slippery floor. Typically in a business related accident the victim generally accuses the business of being negligent, which can cause to even greater expense. General liability insurance reduces your legal costs for these types of accidents as well as for any defamation or slander.
- Product liability insurance is valuable for businesses who deal with products. Whether you are a manufacturer, wholesaler, distributor, or retailer, you could be held responsible for a product that is deemed defective, especially if injury results from the defect. You can purchase different amounts of coverage based upon your needs, so a toy store could buy more coverage than a shoe retailer since there is greater risk of product liability with the toy store.
Service industries do not need product liability insurance if they are not selling tangible items, although they may require different forms of insurance to protect their business. For example, a limousine service does not need product liability, but they are not able to operate without commercial auto insurance. There are various types of professional liability insurance to cover a range of service providers, including errors and omissions insurance for a notary and malpractice insurance for a doctor.
Commercial Property and Home Based Business Insurance
Commercial property is very expensive and requires commercial property business insurance in order to have financial protection for your property. With commercial property you have coverage for a variety of events that can cause damage, including fire, hailstorms, and even vandalism.
When it comes to commercial property insurance you can usually get two types of peril commercial property insurance, one that is more basic or one that has wider coverage that expands to more incidents. Although the type of commercial property you have may make a difference in deciding which peril insurance to purchase, it is a good idea to get prices for both types of business insurance to see if it is cost effective to buy the more extensive coverage.
If you have a small business that you run out of your home, then you need to consider home based business insurance. If you have a home office it is most likely not covered by your personal home insurance, therefore you may need additional coverage to extend to your home office and equipment. Depending on your home based business you may need additional insurance as well, as in the case of operating a home based daycare.
Other Business Insurance
Operating losses can sometimes be significant, so depending on your business you may want to consider buying business insurance to cover potential losses. You also need to check with your state to find out what other types of business insurance is required.
If you hire payroll employees then you may need to pay for unemployment, workerâ€™s compensation, and disability. Disability insurance is required in five states, including California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island. Your state or accountant can provide you with more information regarding your role and responsibilities with payroll taxes.
There are many facets to owning a business and sometimes business insurance gets forgotten or is neglected. However, since owning a business comes with risks and liability, it is important to make sure your business is properly protected and insured. You can get free quotes for business insurance online by entering your zip code in the prompt now!