What Type of Business Insurance Do You Need?

You've invested a lot of time, money and sweat in your business, so it makes sense to protect it with smart insurance coverage. In fact, business insurance should be an essential part of your operations - a necessity for safeguarding your assets, your employees and your livelihood. Business insurance policies come in many forms and several factors determine what coverage you'll need and the rate you'll pay, such as the nature of your business, whether you operate from a commercial building or home office and whether you have employees. Here are the most common types of coverage that small businesses need:

Workers' Compensation: Workers’ compensation provides insurance to employees who are injured on the job and provides wage replacement and medical benefits to them. While state laws vary, it’s required to have workers’ comp insurance, as it helps protects your company from legal complications. Penalties for non-compliance can be very stiff!

General Liability Insurance: Every business, even if home-based, needs to have liability insurance. The policy is designed to provide both defense and damages if you, your employees or your products or services cause or are alleged to have caused bodily injury or property damage to a third party.

Property Insurance: If you own your building or have business personal property, including office equipment, computers, inventory or tools, you should consider purchasing a policy that will protect you in the event of a fire, vandalism, theft, smoke damage, etc. You may also want to consider business interruption/loss of earning insurance as part of the policy to help protect your earnings if the business is unable to operate.

Business Owners' Policy (BOP): Business owners’ policies include a variety of coverages, such as business interruption insurance, property insurance, vehicle coverage, liability insurance and crime insurance. Based on your company’s specific needs, you can alter what your BOP may cover. Typically, a business owner can save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual policies.

Professional Liability Insurance: This type of insurance is also known as Errors and Omissions (E&O) Insurance. The policy is designed to provide defense and damages for failure to or improperly rendering professional services. Your general liability policy typically does not provide this protection, so it is important to understand the difference. Professional liability insurance is applicable for any professional firm including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair salons and technology providers, to name a few.

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