Many small business owners may be apathetic when it comes to business insurance- seeing it as an expense to avoid or to minimize where possible. But savvy business owners realize that business insurance is in essence an investment on the future. The various business insurance products available protect not only the owner(s) of the business, but also secure all of the business’ working relationships including customers, creditors, and investors. With proper coverage, business owners avoid having to pay for all sorts of liabilities, from flood damage to litigious customers.
There are several different types of insurance available to business owners- each one serving its own purpose. Here is a brief rundown of the major options:
- Property Insurance. Purchasing business property insurance is the first step toward security. Even if you rent office space instead of owning your building, property insurance is crucial. It will protect your assets from loss in case of a natural disaster, fire, or electrical surge. You can cover every item in your office, including equipment, carpeting and lighting fixtures. While not typically included, you can adjust your policy to cover theft and embezzlement. Business property insurance also pays for loss of income while the business recovers from damage.
- Liability Insurance. Liability insurance will protect you if someone sues your business for negligence. It should cover personal injury and medical expenses caused by your business. This includes injuries that happened on your premises, and injuries caused by your products.
- Worker’s Compensation Insurance. Most states require businesses to purchase worker’s compensation insurance, which covers employees who are hurt on the job. Business owners benefit, because this insurance guarantees that workers cannot sue their employers for on-the-job injuries. Instead, they will receive regular monthly payments from the insurer.
- Commercial Auto Insurance. If your business uses vehicles, you need commercial auto insurance. Personal auto insurance will not cover company cars. This insurance covers damage to the cars, and damage that the cars might cause to others.
- Health Insurance. Business owners looking to retain loyal workers can offer a health insurance benefits package to their employees.
- Life and Disability Insurance. Life and disability insurance protects the business in the case of the death or disability of vital employee. When properly executed, the proceeds and stipulations of the policy can create a smooth transfer of ownership or company interests among the surviving business partners and relatives.
It goes without saying that business owners should seek a good insurance agent who will listen to their individual needs and explain the policy clearly. The monthly insurance premiums will be money well spent.