5 Types of Business Insurance and Why You Need Them

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No matter what size or nature your business may be, there is one constant: the need to have business insurance. You need to be aware of many aspects of your business when you are looking for new insurance or reviewing your existing coverage. Every business is unique and will require different insurance requirements. A company producing physical goods might need different insurance than one that offers services. There are commonalities in both scenarios, so listed below are the types of insurance all businesses should consider.

Workers’ Compensation Insurance for your employees

In almost all states, workers’ comp insurance is required by law. The insurance covers medical costs as well as a portion of lost earnings for employees who become injured or ill while on the job. This type of insurance typically covers only injuries or illnesses that occur at the job site. For example, an employee who slips on wet floors.

Because Workers’ Compensation laws can vary depending on the location of your business, it is important to consult an insurance professional to ensure you are getting the right coverage for you and your business.

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General Liability Insurance

General Liability Insurance covers your business against a wide range of claims. This includes injuries, accidents, and claims of negligence. This insurance covers things such as property damage, legal costs, slander, libel, slander and faulty products. While no one plans to be sued, there is always the possibility. This is something you don’t want to happen to your business. The better the protection,

Professional Liability Insurance – “Errors & Omissions” coverage

Professional Liability Insurance is also known as “Errors and Omissions Insurance” or “Malpractice Insurance.” This insurance protects you against lawsuits alleging negligence in the provision of professional services, shoddy work or making mistakes or other omissions. This insurance is especially important for service-based businesses, but it can also be required for other types. It’s possible to make mistakes. Professional Liability Insurance is helpful even if it doesn’t seem like you will need it.

Property Insurance

Property can be defined in many ways. It is important that you have adequate Commercial Property Insurance. Small businesses would not be able replace their equipment if there was damage or loss without this type of insurance. These types of insurance cover buildings, computers and inventory as well as supplies and equipment. There are two types for Property Insurance. “All-risk” policies cover most property. It is an excellent way to avoid duplicate or overlap in coverage as well as to minimize gaps when trying cover your liabilities. “Named-peril” or “Peril-specific” coverage covers only perils specifically identified in the policy. These policies are usually required when there is high risk in a particular area.

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Key Executive Insurance – Protection and Benefit

If you want to attract talented employees, offering life insurance for employees is a good option. An executive can be covered by the business. These employees are crucial to the company’s success and can sometimes need additional insurance. This is another way to attract top talent.

Businesses can offer “Key Person” policies that cover employees who are essential to the company’s success. Key Person Insurance covers against the unexpected death of a key employee. Often, the benefit amount is equal to the expected revenue loss and the costs associated with finding and training a replacement. The insurance is considered an asset of the business because the business pays the premiums.

You can combine these basic coverages into a package policy. This is often called a Business Owner’s Policy (or BOP). Insurance companies often bundle coverages. This can help save you money as long as the coverage is correct.