When you’re setting up a new company, it can often feel like there are endless requirements you need to meet, when all you really want to do is get started. One of those requirements that you should consider carefully, however, is your business insurance. It’s perfectly understandable to want to jump in and see your ideas turn into a money-making venture straight away. However, it’s vitally important that you invest time in making sure you’re protected if anything were to go wrong.
There are many different factors that go into deciding whether your company needs insurance and which is the right one for your needs, so make sure you compare all the options.
1. What Are Your Legal Requirements?
Much depends on the industry and region your enterprise operates in when deciding whether you are legally required to take out an insurance policy. Different countries and states will have their own rules on what policies different companies need, so this should be a big consideration when looking. Even if you’re not legally required, it is still very necessary to make sure you are covered in all situations.
Make sure you understand your legal obligations when it comes to this, but equally, be aware that just because you’re not legally obliged to take out a policy, it doesn’t mean it’s not a good idea.
2. Understand the Risks of Your Industry
Different industries carry very different risks for businesses. For example, if you practice law, your risks are going to be very different compared to if you own a restaurant. When practicing law, a common risk might be that you lose your client a case through your error, which would relate to professional liability. If you own a restaurant and someone gets sick from eating your food, then this would be a different risk and fall under product liability.
Understanding what risks your company will be exposed to will help you make the right decision when it comes to whether you need to invest in a new policy and which one suits your enterprise the best. We will explore the different policies below.
3. Choose Protection Over Savings
When it comes to a variety of aspects in a business, it’s quite tempting to make a quick saving and skimp on your coverage in order to save some money in the short-term. However, you can’t put a price on peace of mind. If something was to happen (and it does!), then you need to know your company is not at risk, and the best way to do this is to get the right level of coverage. Hopefully, you’ll never need it, but when you do, you’ll be thankful you spent that little bit more and got the right policy.
4. Go with a Trusted Provider
In the 21st Century, we have access to huge amounts of feedback about other businesses’ services, so make the most of it. Spend a little extra time digging into the policies you’re looking at and make sure they’re good products. There are lots of ways to compare products, so make the most of them and ensure you get the best coverage for your business.
Exploring Policy Types for Businesses
As mentioned above, you need to understand the legal requirements for your industry when you are deciding the type of policy to invest in. Below, we will look into the various types to help you make the right decision for your company’s needs.
- General Liability Insurance: A key policy for any industry and niche, general liability protects an enterprise against any damages to third parties. Sometimes referred to as commercial liability insurance, it specifically covers a multitude of accidents that can occur to other people while your business is completing work. An example of when this insurance is crucial is if you are a plumber. You complete a job, and upon finishing, you notice that your tools have damaged the wall of the property. If you have this policy, fortunately, it will cover the cost of repairs. It is a basic need for every business, and there is a variety of expert general liability business insurance policies you can choose from, like Next Insurance.
- Product Liability Insurance: If your business creates products from scratch, this insurance is essential. During the manufacturing process, you will take every step to make sure the products are safe, but unfortunately, accidents can happen. If one of your products damages property or harms a consumer, Product Liability will protect your enterprise. What’s more, you can invest in a tailored policy, created especially for your specific product.
- Vehicle Insurance: Whether this is a company car that employees’ use or vans to deliver goods, this form of insurance will cover your company in the event of an accident that occurs while an employee is using the vehicle. It doesn’t matter how big or small your commercial vehicles are, this policy is a safety net in case of accidents, which may involve the employee using the vehicle, equipment within the vehicle, or a third party. It is crucial to note, however, that this insurance does not cover an employee’s personal vehicle.
- Property Insurance: If you own a building or rent, you must invest in property insurance. A comprehensive property insurance policy will include coverage for equipment, inventory, and furniture in the event of theft, fire, and most natural disasters. It’s wise to note that this does often not include floods and earthquakes, so if your property is located in an area where these are common events, you will need to look into a more tailored policy.
- Workers’ Compensation Insurance: Every business owner wants to take care of their employees because doing so ensures the longevity and success of the business. After all, a company is only as strong as its employees! This policy protects both the business and the employees should they experience any injuries during their work. For example, an injury could include slipping within the workplace or sustaining a long term condition, such as Carpal Tunnel Syndrome, as a result of repetitive tasks over the years at your company.