6 Types of Insurance You Need for Your Small Business

 6 Types of Insurance You Need for Your Small Business

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Your small business is your baby, and you want to take care of it. Unfortunately, this isn’t always easy—especially when you’re a start-up or a small business with limited resources. One way to ensure your company has the proper protection is by purchasing insurance. Experts recommend that you get at least some insurance coverage for your business before hiring employees or making major investments in equipment or property. Here are six types of insurance every business should consider:

1. General Liability Insurance

General liability insurance is a type of business owner’s policy that covers a company in the event of lawsuits against property damage and bodily injury caused by your business operations. General liability insurance also covers legal fees and other costs associated with potential lawsuits. If someone sues you because they were injured while visiting your store, general liability will pay for any court costs involved with defending yourself against their allegations.

Suppose you own a cannabis dispensary; dispensary insurance can help tailor an insurance plan that protects you from injury caused by your product, damage to your property or crops, and environmental or pollution mishaps. Basically, anything related to running an efficient and profitable business.

2. Business Property Insurance

Business property insurance covers your business against the loss of property. This includes the building, the contents (the equipment and stock), and any income lost when you temporarily close following a natural disaster or other unforeseen events. Business property insurance also helps cover the cost of rebuilding or repairing your property if it is damaged or destroyed by fire or other causes.

3. Workers’ Compensation Insurance

Workers’ compensation insurance is one of the most important types of insurance for your small business. This coverage is required by law and can help protect you if an employee gets injured on the job. Suppose an employee suffers a work-related injury or illness that keeps them from working for more than three days. In that case, workers’ compensation pays all or part of their wages during this leave period.

4. Professional Liability Insurance

Professional liability covers more abstract risks, such as errors and omissions in your business’s services. It will protect you from lawsuits if one of your clients or patients is injured because of something you did or failed to do. Professional liability coverage includes breach of contract. 

This could occur when an employee signs an employment agreement with a company but then leaves before the agreed-upon time, if a vendor fails to deliver products or services within the agreed-upon timeframe, or if an independent contractor does not meet the deadlines promised in their contract with the insured party.

5. Business Interruption Insurance

Business interruption insurance is a type of coverage that can help you recover from the financial loss you suffer when your business is forced to close due to damage or destruction caused by an insured peril. This type of policy typically covers:

  • Direct physical loss or damage from fire, lightning, windstorm/hurricane, explosion, and water damage.
  • Business revenue lost while your business is closed due to repair work being done on the premises.
  • Losses resulting from flood conditions when those are covered under this type of policy.

6. Data Breach and Cyber Liability Insurance

Data breach and cyber liability insurance is a type of coverage that pays for the costs associated with data loss, theft, and other cyber attacks. Suppose you have customers or employees whose personal information is stored in digital format (think email addresses, phone numbers, credit card numbers). In that case, you could be on the hook for some severe expenses if they were to be stolen.

Such incidents can lead to fines from regulators like the Federal Trade Commission or state attorneys general, as well as lawsuits from customers who’ve violated their privacy or suffered financial losses due to identity theft.

Conclusion

The bottom line is that you can’t be too careful when protecting your business. Even if you think you don’t need something, it’s always better to protect yourself from a potential liability than risk losing everything (and being unable to recover).

traciejohnson

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