Insurance comes in many different facets. When thinking about insurance, it’s easy to generalize it without thinking of the different types of insurance that are available, especially for businesses. For any company or business, it’s crucial to have protection from unforeseen liabilities, damages or financial loss. Insurance keeps the art of trade moving, ensures stability and a peace of mind. Here are five common types of business insurances that every small company should have:
General Liability Insurance: Provides both defense and damages if oneself, an employee or services from said company cause injury, harm or property damage to a third party. In most situations, liability insurance is required by the law. With liability insurance there are limits one is required to select. These limits determine the maximum amount your insurance company will pay if you need to use the insurance coverage.
Business Owner’s Policy: Often known as a BOP, is essentially an extensive package that takes care of a business owner’s needs. This type of insurance is thorough and detailed as it includes property insurance, liability insurance, crime insurance, business interruption insurance (covers the loss of income that a business loses after a disaster) and vehicle coverage, if applicable.
Directors and Officers Insurance: This insurance focuses specifically on the officers and directors of a company. It protects directors and officers against any actions that would influence the income or profitability that the company receives. This insurance will help a director or officer of a company if they are found in a legal situation or any actions resulting in a lawsuit.
Workers’ Compensation: Employees oftentimes get injured on the job. This insurance provides compensation or medical benefits to those who were injured while working. Compensation insurance is important because it helps protect those at the company from legal complications. The laws vary in states, but most companies are required to have workers’ compensation if employers have W-2 employees.
Professional Liability Insurance: This insurance, also known as Errors and Omissions Insurance (protects a company and its workers against claims made by clients for not doing work properly), provides defense for failure to properly solve an issue pertaining to professional services. This insurance is applicable for professional firms in the areas of consulting, real estate, accounting and more.
If you are running a business or company, knowing these five types of insurance can be very beneficial and help you get on the right starting path towards growing your business. A solid business has a solid understanding of these types of insurance. The behind the scenes of any company goes far beyond the work and time put in, but the strategic planning of implementing insurance the correct way goes even further.