Unless you’re an insurance broker it’s never fun to think about insurance, the trouble is as business owners we all need to think about insurance because it’s a business necessity nowadays. You obviously want to do everything you can to protect yourself and your family from loss, if something should go wrong. You might find it hard to imagine anything going wrong in your business, but it happens to numerous people daily and it could happen to you, so be sure to protect yourself.
General Liability Insurance
The point of liability insurance is that if employees, contractors, or your products cause any damage to a customer or third party, you will be covered up to a certain threshold.
Whether your business is on personal property, or you rent or buy a separate location, it’s important to purchase specific business property insurance outside of your typical personal property insurance. Likely, if you never do business on your property, you don’t need this insurance. However, if you have a large amount of materials at home you may want to consider it as really expensive equipment such as an excess number of computers, servers or inventory will not be covered.
Professional Liability Insurance
Sometimes this is called “errors and omissions insurance” and it does what it says. If you provide a professional service that requires licensure in your state, it is important to obtain this particular type of insurance as general liability insurance does not cover these types of issues.
Workers’ Comp Insurance
Not all business types are forced to buy workers’ comp insurance, and a good insurance broker can let you know if it’s something you should consider. Generally, if you do not hire employees and they don’t work on your property, you do not need to buy any. Be sure you know whether you must buy it or not because if you don’t buy it and it’s required, you could be penalized and fined.
Directors’ and Officers’ Insurance
If you have an LLC or an INC, sometimes the offers of the business can be sued personally for issues that come up. At the time of writing, a big case is underway at the US Space & Rocket Center in Huntsville Alabama where the CEO, CFO, other officers and heads of the business are being sued on behalf of employees. Hopefully they have such insurance to protect the interest of these people.
Data Breach Insurance
If you keep client information on file, it is imperative that you purchase data breach insurance in case your security measures fail. Whether the information is about customers, clients, employees, contractors or someone else… if it is not generally available to the public and is sensitive in nature, you should consider data breach insurance.
Business Owner’s Policy
A general business owner’s policy sold by an insurance broker who understands what a business like yours needs will usually include all the different types of coverage that you require. This includes many listed in this article. When services are bundled you can save money.
Life Insurance, renters’ insurance, home owners’ insurance, auto insurance, life insurance, disability insurance and umbrella insurance all fall into the category of personal insurance and should be considered for anyone who has a business. This is in addition to the other types of insurance that are strictly for the business. You want to think in terms of how you can protect your family when choosing the amounts of coverage for these types of insurances.
As to how much of each type of insurance you need, it is important to speak directly to a professional insurance broker to be sure that you are fully covered for things you may not even think about. Choose an insurance broker who works with many different types of insurance and has a good understanding to explain the benefits and pitfalls of the types of insurance that they promote. If you need help with insurance I personally know a few brokers and will pass along their details if you contact me.