As much as we’d all like for life to go as planned, sh*t happens. Every business should have some form of business insurance. Business insurance is designed to protect business owners from potential business liabilities. Whether you are making the decision yourself, or your landlord is requiring you. Now, what kind of insurance you should have depends on your business type. Not everything I mention will be suitable for every business. In fact, some businesses may require insurances not in this article. I will show you what business insurance is, why you need it and how to get it.
What is Business Insurance?
Business insurance refers to a variety of insurance coverage options available to businesses. These types of insurance have one thing in common- their purpose. To protect business owners from potential business liabilities. This business coverage can also indirectly and directly cover losses which would otherwise be acquired by a landlord.
Business insurance can cover a variety of losses such as real estate losses, vehicle losses and accidents, legal claims and health insurance, among others. There are also certain types of insurance, such as malpractice insurance, that are designed for other specific fields in which you operate. Although the ‘right’ business insurance will vary from business to business, there are certain types of insurance that are useful to a large percentage of businesses.
8 Insurances Designed to Protect You From Business Liabilities
- Property and Casualty Insurance – Property and casualty insurance each cover different, but important, aspects of a business. Property insurance covers the physical location of a business. The policy will set forth the exact coverage for fires, theft, flood and earthquake damage. Casualty insurance covers the business operations. These two types of insurance are often related.
- Commercial Auto Insurance – If you use any vehicles for your business, commercial auto insurance is beneficial. This insurance covers loss or damage to vehicles used by the business and damage to others caused by the business’ vehicles.
- Liability Insurance – Liability insurance coverage is essentially lawsuit coverage. It covers negligence claims brought against you in relation to your business. Certain professionals may also have malpractice insurance for similar protections.
- Product Liability Insurance – Product liability insurance is useful to businesses that design, develop, manufacture, supply or sell one or more products. This insurance insures for damages caused by products designed, developed, manufactured, supplied or sold by a business.
- Business Interruption Insurance – This insurance protects owners from the interruption of business operations; such as major repairs, power outages, etc. When normal business operations cannot be carried out, this coverage makes up for lost cash flow and profits during the interruption.
- Health Insurance – Commonly known as health coverage for business owners and their employees.
- Life and Disability Insurance – Life and disability insurance insures the businesses, in the event of a key owner, partner or employee dying or becoming disabled.
- Workers’ Compensation Insurance – These programs cover employee injuries. Any employer with employees must participate in worker’s compensation programs.
Why Do I Need Business Insurance?
Now, why you need business insurance that is suitable for your business is pretty straightforward. You need to protect your personal assets, as well as your business,’ from any potential liabilities. This is where many people get it wrong. Your landlord, lender or third party may even require you to have certain insurance coverages.
Business liabilities and losses come in a variety of forms, and there are far too many to cover here. These liabilities and losses range from legal judgments, claims, tax losses and liabilities, [intentional, accidental or natural] theft, property damage, and the list goes on. Even if you believe you are protected by the entity structure of your business, “piercing the corporate veil” is always a risk that can lead to you being held liable for your business’ losses and liabilities.
How do I Get Insurance for My Business?
You start the insurance buying process off by speaking with an insurance professional. Which may be an agent or a broker. If you are operating multiple businesses, working with one agent or broker can be extremely beneficial. That way they already have an understanding of how to assist in your business insurance needs. When narrowing down your selection of prospect agents or brokers, getting recommendations from other businesspeople is ideal . Research the agent or broker for any administrative or ethical discipline procedures.
Before visiting with an agent or broker, think through what your business does and doesn’t do. Do your own research into the types of coverage options available. Determine what types of coverage are or are not relevant to your business. Consult with an attorney if you have agreements with landlords, lenders or other third parties. As they will likely might required by these agreements to carry certain coverages.
Overall, figuring out what business insurance covers you and your business is not a difficult process. Although it can be tedious, compared to the other difficulties of starting and running a business. Our attorneys at Dodson Legal Group will review your agreements and inform you about which insurances are required. If you are a third party, such as a landlord or a lender, we will guide you through what types of business insurance you should be requiring for your tenants. To schedule a consultation with one of our attorneys, please call 844-4DODSON. Or schedule your FREE 1 hour virtual consultation here.