Starting A New Business: 7 Types Of Insurance You Should Consider
Dan Levenson May 24, 2016
By the time a new business is ready to open its doors to the public, its owners have typically invested substantial time and money into the effort. From purchasing or renting real estate to scouring the Internet for the very best deals on the best equipment to launching a website and an advertising campaign, those starting a new business stand to lose a lot if that business is not properly protected.
The best way to protect a new business is to make sure you have the right coverage from the start. Here are 7 types of insurance for new businesses that every new businessowner should look into obtaining.
1. General Liability Insurance
Liability insurance is a must for every business, even those that are run out of one’s home. This will provide protection against any claims that the business owner, employees, or products/services have caused any bodily injury or property damage to another party.
2. Commercial Property Insurance
Property insurance is appropriate for those who own the building in which the business is run, as well as for every business that owns any property at all, including equipment such as computers, inventory, or tools of the trade. This coverage will protect a business from property loss that may occur as a result of fire, vandalism, theft, smoke, and more.
It is worth considering adding business interruption or loss of earning insurance to this policy as well to protect the earnings that would have occurred during any time that the business is unable to operate as a result of any of the aforementioned causes.
3. Business Owner’s Policy
A business owner’s policy, also known as a BOP, is actually a package that includes all of the coverage a particular business owner is required to have. It can be tailored to an individual business to include such coverage as business interruption insurance, liability insurance, crime insurance, property insurance, and vehicle insurance.
This option is worth considering because it often saves money over purchasing each of the included types of coverage individually.
4. Commercial Auto Insurance
This type of insurance will protect any vehicles used by the company. These include vehicles used to transport employees, equipment, or inventory, and protects said vehicles from collisions and damage.
Alternately, if the company does not own any of its own vehicles but instead has employees use personal vehicles for company business, a non-owned auto liability policy should be purchased to protect the company against loss in the event that the employee’s auto insurance is insufficient. This coverage can often be added to a BOP.
5. Worker’s Compensation
Worker’s compensation insurance provides coverage for injuries sustained by employees while on the job, including wage replacement and medical benefits to those employees. When an employee receives these benefits, he or she waives the right to sue the company for the incident that resulted in injury, making it well worth its cost.
While each state has its own laws regarding worker’s compensation insurance, every state requires businesses with W-2 employees to carry the insurance, and many carry severe penalties for non-compliance.
6. Professional Liability Insurance
This insurance is especially appropriate for businesses that provide professional services, as it provides both damages and defense for improperly rendering, or failure to render, professional services. Businesses that may benefit from this type of insurance include lawyers, accountants, consultants, real estate agents, and notaries among other professional firms.
This protection, which is sometimes called errors and omissions insurance, is not included in general liability insurance, so do not make the mistake of believing one to be in lieu of the other.
7. Cyber Liability Insurance
Businesses that store sensitive, private information on either customers or employees would do well to purchase cyber liability insurance, as skilled hackers, both domestic and international, make data breaches every day news.
Such businesses are responsible for keeping that information safe, and a data breach from paper files or electronic files can lead to expensive lawsuits. The cost of such a breach can be mitigated by carrying cyber liability insurance.
To talk more about the insurance that is right for your new company, contact us for a free new business assessment. Our team can help you determine the best types of coverage that are right for your specific needs when starting a new business.