From flooding and fire to breaking and entering, at the beginning phase of an entrepreneurship journey, your little empire is at risk of various catastrophes. Therefore, it's crucial that you secure your business' future with the right insurance, that will cover for all the potential damages. With only one lawsuit or catastrophic event and with no proper insurance policy, your small business can be wiped off the map before it even has a chance to grow. Fortunately, you can pick from a wide range of insurance policies and easily protect your business's future.
To determine what type of insurance your business needs, you need to ask yourself the following questions. How much equipment do you own? How big of an inventory your work has? Would it cost a fortune to replace everything? Would you have a place to relocate your business in case of a disaster? After you've determined your business' net worth, and calculated how much it would cost you to recover from these types of damages, you'll realize that an insurance policy is highly necessary for your business.
Even though you've decided to protect your business with an insurance, this doesn't mean you want to use it any time soon. It's essential that you do your best to protect your business from any damages, which may require you to use your insurance policy. Therefore, make sure you install motion-sensitive outside light, as well as deadbolt locks, fire extinguishers and smoke detectors. Keep all the important documents, money and any valuable belongings in a fireproof safe. Don't overload electrical circuits, clean the stairs and walkways regularly from snow, water and debris to prevent any accidents. Furthermore, don't accept any assignments your business can't accomplish, because you can jeopardize your reputation among clients and future potential customers. Also, leave all the legal issues to your attorneys, and if you haven't found a good lawyer, you can always hire reliable family lawyers that you've turned to in the past. They'll make sure you read all the fine print in the contracts, or they'll explain it to you, and prevent you from assuming someone else's liability. Only after your lawyer has reviewed all the details in the contract should you put your signature on it.
From a variety of insurances, you should pick the one that'll best protect your business. Professional liability insurance covers a business against negligence claims, which may be the result of a harm coming from mistakes or failure to perform.
Worker's compensation insurance
For all the entrepreneurs that don't run their business on their own, but have a few employees, the moment they hire a first one, they should get a workers' compensation insurance. Adding this insurance to a business's insurance policy will cover death benefits, disability and all the medical treatment in case of an injury or death at workplace.
2. Property insurance
If your business leases or owns its own space, you will need a property insurance, to cover for furniture, inventory, signage, and equipment in the event of a theft storm or fire. However, if you live in an area prone to earthquakes and floods, you'll need to check with your insurer if you'll need a separate policy against these damages, because a standard property insurance usually doesn't cover for these damages.
3. Product liability insurance
Product liability insurance protects a business that manufactures products for sale on the general market. Even with all the possible precautions, you can end up with a lawsuit on your back, because your product caused a certain damage. Therefore, make sure you have a product liability insurance and tailor it specifically to a type of product you manufacture.
4. Home & home business insurance
Starting a business at home has become more frequent, which is why you'll need a separate policy from your home insurance that will cover all the costs for any damage that might happen to your home-based business. Furthermore, if you're running your business out of your house, you can have an additional insurance to cover your inventory in case of an emergency.
5. Business interruption insurance
A disaster or catastrophic event may cause a decrease in your income, and this is why you should have business interruption insurance. Blizzards, hurricanes, or earthquakes will prevent your employees to come to work, the customers will also stay indoors for some time, so this insurance will compensate for all your business lost income.
6. Insurance against third-party injury
If your business is related to transportation, or you just rely on vehicles most of the time, you should protect your business against liability in case of an accident. Make sure you are insured against third-party injury, and have the vehicle in an accident covered as well.
Protecting your business from various damages, losses or hazards is crucial for the survival of your company. Therefore, make sure you get the best insurance policy for your business, and protect your assets so you can avoid using an insurance in the first place.
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