There are numerous types of insurance options that you can get to protect your company. Insurance safeguards your business from different risks that can come up unexpectedly. Deciding what kind of insurance your company needs can seem overwhelming, but this article can help.
Most business owners start with a business owner’s policy because it combines three crucial coverages: commercial property insurance, general liability insurance, and business income insurance. Unfortunately, this insurance solution doesn’t cover all scenarios, and you should research to find out what policies can protect your company from legal claims and financial damage.
What is business insurance?
Before making a list of insurance policies you can get for your business, it’s best to understand what business insurance is.
As an individual, you’ve probably dealt with the term of insurance before. You probably have health insurance and car insurance. As you already know, each policy covers a different situation.
Business insurance operates on a similar principle because it protects your business from legal, financial, and other claims in case of an unexpected situation. Like personal insurance, business insurance comes in different forms, and depending on the specific of your business and how you operate, you need to buy some particular policies.
Types of business insurance companies should get in 2023
Now that you know how insurance works, let’s talk about the most important kinds of policies available on the market.
Workers compensation insurance
Workers compensation insurance is required when you have employees. When a worker experiences a work-related injury, this policy covers their medical expenses and pays them a wage until they recover. For example, workers compensation insurance covers the medical costs associated with a lower back issue that stems from lifting heavy items. In case an employee sues your business for a work-related injury, the insurance can cover the cost of the lawsuit.
The government requires all companies to have unemployment insurance to cover their employees in case of job termination or loss. Unlike other types of insurance, you don’t purchase unemployment insurance from an insurance company. You pay federal unemployment taxes and state unemployment taxes together with your payroll taxes to the state that administers a program that should protect workers. The expense of the unemployment insurance depends on the number of workers you have, if your business is new or established, and the employee turnover. When someone is out of work, they get unemployment benefits from the state to help them bounce back.
This policy provides guarded payments to your employees at a percentage of their income when they cannot work because they experience a health issue. The disability insurance differs from the workers compensation because the employees’ health issue doesn’t have to be work-related. For example, when one of your employees is pregnant or broke their leg in their free time, they receive disability benefits. Currently, five states, Rhode Island, New York, Hawaii, New Jersey and California, require companies to get disability insurance. It should cover workers for three to six months after they fail to come to work.
However, even if your company isn’t in one of the above states, you should still get short-term disability coverage because it provides you with peace of mind in the current conditions. Long-term disability coverage is also an option, and it gives you a competitive edge on the employment market, but it’s usually more expensive, and small companies don’t afford it.
Commercial property insurance
This policy covers your office space, inventory, equipment, and other business property against damage or loss. Commercial property insurance is essential for all businesses that have a brick-and-mortar location or storage space. It covers incidents like weather-related damage, vandalism, and theft. Some policies even pay for damage from accidents or flooding damage.
However, you should know that it doesn’t cover natural disasters like tornadoes and earthquakes, so if you live in a tornado-prone area, you need to get in touch with your insurer to identify the best policy for this kind of situation. Depending on your business’ location and the type of disasters that can hit it, you may have to buy extra insurance.
Considering the events from the past months, you should also consider getting business interruption insurance because it protects you against lost income.
Bobtail truck insurance covers driving trucks without a trailer for commercial purposes. If your business uses these vehicles, you should consider getting this kind of coverage to use it if a commercial truck driver gets into an accident when the vehicle doesn’t have a load or trailer. You need this insurance policy because the car insurance or trucker’s liability insurance doesn’t pay for these claims. In addition, Insuranks.com states that bobtail insurance covers all the financial expenses associated with an accident that involves a truck without a load or trailer.
Product liability insurance
Supposing you sell tangible products, you should consider getting product liability insurance and add it to your general liability policy. This kind of insurance covers the full product lifecycle. For instance, your manufacturer may create a defective product or defective package for the product, and the buyer sues your business because your brand is on the label. Product liability insurance protects your business in these situations.
And the great thing is that this type of business insurance is affordable, so there’s no reason not to get it.
Key person insurance
Key person insurance is created to ensure that the company survives the owner. When the owner or a key executive becomes disabled or dies, the toll on the brand can have daunting effects. The company can experience loss income during the transition, and even partners and clients that the key executive brought to the table. To protect your organisation, you can purchase this policy and ensure your company will stay on its feet in case one of the key executives becomes disabled or passes away. Key person insurance makes your business durable and less dependent on the skills of a team of people.
Insurance providers offer multiple kinds of business policies so you can cover all your needs. But it would help if you determined which coverage is suitable for your organisation.