Business Insurance Plans – Do I Need One?

Would you rock climb without a harness? How about race a car without a seatbelt? Of course you wouldn’t! Those items protect you and allow you to perform risky maneuvers in relative safety. Without them, you’re vulnerable to serious injury, if not certain death.

Similarly, you’d never operate a business without the proper insurance. There are simply too many risks involved. Just one lawsuit or catastrophic event could not only ruin your business but expose your personal assets as well. It would be like skydiving without a parachute—you’ll spend the rest of your life paying for it. Therefore, it’s vital that you obtain proper insurance.

While health insurance and employee benefits are important things to think about as an employer and business owner, you should first consider a business insurance policy. Confused about which business insurance plans is right for your company? Find out how to keep your business protected with our complete guide.

Business Insurance Plans: Do I Need One?

A common question asked by laymen is, “Do all businesses need insurance?” The answer to this is an emphatic “yes” with a small “maybe” attached. Although it is not legally required for every type of business, it’s strongly suggested for the vast majority of them. There are simply too many possible perils or unexpected issues that may crop up. Operating without a blanket of protection would be foolish.

For example, consider some of the possible issues that might arise:

• Liability claims
• Property damage
• Theft
• Employee injury
• Crash
• Vandalism

Any of these things could lead to thousands, if not hundreds of thousands of dollars in losses to you and your business.

Liability Insurance

At the very least, you’ll need to get liability insurance, especially if you’re a small business owner. This covers the cost of any liability claims levied against your company. It comes in a variety of forms, but the two most common are General and Professional liability.

• General Liability – Covers the costs of claims made by customers who suffer bodily injury or property damage while in your store or using your product. For example, if a customer falls down stairs in your office and sues you, general liability would cover their medical costs.
• Professional Liability – Also known as Errors and Omissions insurance, if there is a mistake or slip-up with your professional good or service, E&O would cover the costs of the claim. For example, if there was a clerical mistake that resulted in the wrong procedure being done on a patient, professional liability would protect you from the inevitable suit.

Small Business Insurance

Naturally, a business insurance policy needs to be tailored to the specific business’ needs, operations, and inherent risks. That said, there are packaged policies such as small business insurance that cover several of the intrinsic liabilities to running your own company. Typically, they’ll include the following types of insurance coverage:

• Property insurance – If you own a building or rent an office space, property insurance protects the property itself as well as the equipment inside from certain events like:
  • Smoke damage
  • Theft
  • Vandalism
  • Fire
• Workers’ Compensation – In most states, workers compensation is legally required if you have W-2 employees. This provides benefits to full-time employees and part-time employees who suffer injury or illness on the job and need to take time away. It covers their medical bills and pays a salary in exchange for them agreeing not to sue.
• Commercial Umbrella insurance – If a liability claim is made against your small business that surpasses the limits of your general or professional liability coverage, commercial umbrella insurance helps cover any surplus costs.
• Auto insurance – If you have a company car or your employees need to drive around as part of the job, auto coverage protects you from damage to employees, equipment, or machinery that resulted from an accident or collision. In addition, auto insurance protects your business from liability claims arising from a third-party being injured by one of your employees.
• Business Interruption – If a disaster occurs, the business may need to temporarily shut down, especially if the office is damaged. This cessation of work and damages to the property would cause the business to incur serious losses. Business insurance compensates your small business for lost income caused by such unexpected events.

Business Insurance Plans

Insurance plans ensure that your business is safe from any possibility. At the very least, you should consider purchasing a business owner’s policy which bundles:

• Business income
• Property insurance
• General liability

Taking the necessary steps to safeguard your business ensures that it will continue regardless of unintended hardships. So, if you want to protect your business from any liabilities, reach out today and speak with a NOW Insurance agent. With their help, you can create the perfect plan for a healthy and secure business.

 

Sources:

1. Haskins, J. Legal Zoom. Business Insurance: When You Need It and When You Don’t. https://www.legalzoom.com/articles/business-insurance-when-you-need-it-and-when-you-dont
2. Wescott, S. Merchant Maverick. Do I Need Business Insurance? (2019). https://www.merchantmaverick.com/is-business-insurance-necessary/
3. NFIB. Small business Insurance Dos and Don’ts. (2016). https://www.nfib.com/content/resources/insurance/bizhelp-small-business-insurance-dos-and-donts-74003/