6 Types of Insurance Coverage That Every Business Needs
Insurance can shield your business from unexpected events. Some risks can be mitigated or eliminated, but insurance coverage is needed to survive a significant natural disaster, employee or customer injury or product failure. The right mix of coverage can ensure your company is protected against these incidents and damages. Here are 6 types of insurance that every business should have to protect their company.
Most states require businesses carry Workers’ Compensation to protect the employees in the event of an accident. If an employee is injured on the job Workers’ Compensation can provide replacement income, and pay for medical expenses. In exchange for these benefits, employees give up the right to sue an employer for a work-related injury. Workers’ Compensation ensures an injured employee receives proper medical care, and compensation. It also protects employers from lawsuits resulting from injuries on the job.
General liability insurance protects your company from bodily injury, property damage or other types of injury on your business premises. This covers slips and falls in your store or damage to a customer’s property while working on the premises. General liability covers legal costs and settlement payments or judgments that are awarded to the injured party. The amount the insurer will pay depends on the scope of coverage and maximum amount stated in the policy. An umbrella policy can be bought to provide additional protection in cases where the lawsuit exceeds the general insurance maximum amount.
Business property insurance protects you from damage from fire, hail, theft, wind, smoke or vandalism. This insurance covers buildings. Property insurance sometimes includes a “business interruption” add-on, which will reimburse you for lost income related to property damage. A business property policy with adequate coverage levels can help shield your operations from unexpected events.
Business Owner’s Policy
A business owner’s policy, or BOP, is a comprehensive package that combines the most common types of property and liability insurance. This comprehensive package can allow you to get competitive rates. BOP protects your company from a wide variety of damage, from customer falls to property damage. A business owner’s policy is often less expensive than purchasing coverage separately.
Professional Liability or an errors and omissions (E&O) insurance is coverage for business owners who work directly with customers offering services or advice. E&O protects your business from claims of negligence, failure to perform or improperly providing services. This protects your business by covering the cost of damages associated with lawsuits due to alleged negligence or errors.
Data or Cyber Breach Liability
Data or cyber breach liability insurance protects against lawsuits resulting from a cyber-attack or hack. These breaches can cause critical customer information to be stolen, such as credit card numbers, Social Security numbers, addresses, and medical records. Any business that stores personal information needs data/cyber breach liability insurance. This provides the funds for you to react quickly to restore customer confidence and mitigate further damage. Some insurance companies include consulting services and software to avoid such attacks.
Insurance coverage protects your business and the future of your company. Owners who skimp on the type of insurance can end up paying out more in the end.