Operating a business comes with unique risks and responsibilities. While you strive to meet the needs of your customers, accidents can happen. Without protection in place, you may be at risk of losing everything. Business insurance can protect you.
Business insurance helps cover the costs associated with potential claims involving property damage or other liability issues. If a potential liability issue arises and you don’t have coverage, you will have to pay out of pocket to handle the expenses. If the claim is especially serious, you could lose everything or put the future of your business in jeopardy.
Is Purchasing a Business Insurance Coverage Mandatory?
Purchasing business insurance is not mandatory. It’s simply an asset to help protect your assets when dealing with a claim or lawsuit. If you have employees, you are required to purchase some type of insurance. Having workers’ compensation and unemployment insurance is mandatory in many states. You may also be required to purchase disability insurance.
The Different Types of Business Insurance Coverage and Their Functions
Business Owner’s Policy
A business owner’s policy combines multiple types of coverage, including business liability, business property, and business income insurance, into one policy.
The business property covers any damage to the location of your business and also covers your furniture, tools, and documents. You are protected if an accidental fire happens or if inclement weather moves through the area.
Business liability covers any liability claims filed against your business. Generally, this type of coverage is essential if one of your customers gets injured on your property or they allege that your products caused them harm.
Business income coverage helps keep your business afloat when you have to cease operations because of a covered loss. This allows you to avoid falling behind on your bills and continue to meet payroll while your business is restored.
Your employees are the foundation of your business. Workers’ compensation allows you to take care of them and protect your business at the same time. Workers’ compensation covers the medical bills if one of your employees is injured in the workplace. This also helps your business avoid a serious lawsuit.
Umbrella insurance adds an extra layer of protection in emergencies. Perhaps you are handling a liability claim that exceeds your coverage limits. Without umbrella insurance, you will be forced to bear the remaining amount out of pocket once your coverage reaches its maximum limit. Umbrella insurance will take care of the difference.
Things to Consider Before Buying Business Insurance Coverage
Because there are so many types of business insurance coverages available, you can find a policy tailored to address the specific needs of your business. Before you choose a policy, think about the industry you are working in, the amount of equipment you have, and the number of customers and employees associated with your business.
Purchasing business insurance allows you to focus on growing your business without worrying whether you could lose it all if a disaster occurs. If you have any questions about the type of coverage that’s best for you, our seasoned insurance experts at Weaver & Associates will assist you.