Business Insurance Is Crucial To Your Business. Learn Why!
What Is Business Insurance And The Benefits Of It?
It’s a type of insurance coverage that will cover damages and loss due to circumstances that may take place during normal business operations. It protects your investment by reducing financial risks as a result of unexpected events or natural disasters.
Who Is It For?
This insurance is not required by law unless you are an employer. It is a common practice for business owners to purchase enough insurance to cover their assets.
Personal assets are protected from business liabilities if your business is an LLC or corporation, however, these business structures are not substitutes for liability insurance, which protects your business from loss and damage.
How Does It Work?
Insurance requirements for businesses are determined by your state government. Workers’ compensation insurance, state disability insurance, and unemployment insurance are required by most states.
Some states require insurance for special business activities. For example, you may be required to purchase commercial auto insurance coverage if you own a car or truck and use it for business purposes.
Also, Investors or your financial lender may require you to purchase flood, fire, business interruption, life or other types of insurance coverages to cover their investment.
Types Of Business Insurance
1. General Liability – This insurance covers legal actions due to claims of negligence, injuries, and accidents.
2. Product Liability – This insurance is for companies that manufacture and distribute a product, and it covers loss and damages as a result of a defective product that causes bodily harm or injury.
3. Professional Liability – This insurance is for business owners who provide services, and it protects your business against negligence, errors, and malpractice in the provision of services to customers.
4. Commercial Property – This insurance covers any loss or damage to company property as a result of events such as vandalism, civil disobedience, wind and hail storms, fire, and smoke.
5. Home-Based Business – Homeowners’ policies do not cover home-based business losses. You can add a rider to your homeowners’ insurance to cover general business risks such as property damage. Also, you can purchase additional insurance to cover other risks such as professional liability.