So you started your own business. Have you seen a hole in the market or had a bright new idea. You have things going on and maybe you even started making some money. Well, before we go any further, it’s time to think about insurance for your business. After all, you’ve taken a big risk in starting your own business, which means you need to mitigate those risks in the best possible way.
The hard fact about coverage and businesses is that you need it. Everything you have for your business, from vehicles to basic liability, requires insurance. Without it, you could jeopardize everything you’ve built up, open yourself to crippling financial problems, or even break the law. But don’t worry, here are some basics of covering your business that can help you get the protection you need to be successful.
Types of business insurance
The first thing you need to understand about coverage and your business are the different types that exist. Depending on your business, you may need specific types of insurance. In general, corporate coverage can be divided into three broad categories: owner or partner insurance and key employees, corporate income and property coverage, and liability insurance. Here is a breakdown of each different type.
Insurance for entrepreneurs, partners, and key employees
If you own a business, you need specific types of coverage depending on how it was created. These may include, but are not limited to:
Life insurance – This coverage protects your family if something happens to you. If you are the sole owner of your business, this insurance is essential because the business owners are personally responsible for all the company’s debts.
• Disability insurance – In the event of an accident or illness, disability insurance will provide you with an income for a certain period of time.
• Partnership insurance or buy-sell coverage – If you have a partner in your business, this insurance will help you purchase your partner’s shares and continue running the business in the event of your death.
• Critical illness insurance: if you get seriously ill, this coverage will provide you with a lump sum to help you in the situation.
Key People Insurance: This coverage protects you in the event of the death or loss of those employees who are most important to your business.
Insurance for commercial and real estate earnings
In addition to the coverage that protects people, your company may also request the following types of insurance to protect its assets and earnings. Keep in mind that companies running short of the home may require coverage beyond home insurance. It is always a good idea to contact your coverage company to discuss running a business outside the home.
• Property insurance: This coverage covers all buildings or properties owned by your company if it is damaged or destroyed by fire, earthquakes, avalanches, and other similar disasters.
• Content insurance: if you own a property or a building that stores items for your business, such as a warehouse or shop window, this policy covers the loss of such content. Keep in mind that even if you are renting a space, you could still request content insurance since your leasing will probably make you responsible for what you have entered in the rented space. Home business owners will need to contact their insurance companies to discuss what should be included in their home policy.
• Business interruption insurance – In the event of a catastrophe, this policy will cover the user for the time when his business cannot function with his own efficiency.
Vehicle Insurance – If your company owns vehicles, you are legally required to have coverage. If you use your personal vehicle for your business, be sure to contact your insurance company.
Third-party liability insurance
Liability covers you in case of error or accident for which you can be held responsible. There are three types to consider when owning a business: personal responsibility, product responsibility, and professionalism. These cover you from personal responsibility, from something wrong with your products, and from the lawsuits filed by your customers, respectively.
Starting your own business is a big risk, but that doesn’t mean you should take unnecessary risks. If you own a company, you need the right coverage. Make sure to look around and find the right insurance package for your business. If you have further questions, we can help you make sense of your policies to make sure you get the right types of coverage from the right types of insurance companies.