It seems obvious to purchase the relevant insurance.
Still, over 60% of small business owners don’t have adequate insurance coverage, despite being liable for unending lawsuits.
Many small business owners fail to realize that they are eligible for small business insurance discounts.
Having insurance for your business is one of the main ways to ensure that you are protected and that your business is protected if something goes wrong.
Without it, you are either breaking the law, depending on your jurisdiction, or at the very least will not be able to sleep at night.
So what are the policies that your business needs to consider?
Many different insurance types cover a vast range of outcomes; however, it depends on your business. It really depends on your risk to reward ratio and what you are prepared to accept.
For example, if you own a haulage company, you will need specific auto-related insurance. On the other hand, if you run a dental practice, you will need to consider medical malpractice insurance.
Some of these will be mandatory, but others are necessary to gain the support of your customers or employees.
The five that we recommend for most businesses include:
- General Liability Insurance
- Property Insurance
- Key man insurance
- Income Insurance
- Workers Compensation Insurance
Contents
General Liability Insurance
General liability insurance offers protection to individuals and businesses from various legal exposures in a wide range of settings.
This includes when they are at work and when they are entertaining clients or customers.
General liability insurance protects a business from claims resulting from bodily injury and property damage while conducting business.
In essence, it protects against accidents, injuries, and damage that can occur on your business premises or to your products.
It is one of the most common insurance policies that businesses will need to get an insurance policy for. It is essential to make sure that you have plenty of protection against being sued by those who are injured by your business.
Why You Need It
While general liability policies vaguely cover everything, they are designed to give business owners peace of mind.
You can get other insurance types to cover more specific problems; every business should get general cover as their first port of call.
Property Insurance
If your property is damaged or destroyed, property insurance covers the repair or replacement costs.
This particular category of insurance does not cover the cost of repairing or replacing lost or stolen items.
Property insurance provides a safety net against financial losses that can arise from damage to your property.
If a covered loss happens, the repair or rebuilding costs are covered by the policy.
An important feature of property insurance is that the premium you pay reflects your risk of loss.
So, if you need a lot more insurance, you’ll pay more, no matter if you share the same floor space as someone else. This is why property insurers often bundle their policies with other types of insurance related to the property.
Why You Need It
General insurance will cover only fundamental aspects of property damage, but if you select wisely, a property coverage tailored to your type of operation will protect you from business-specific issues.
For example, if you own a fulfillment business, it will cover you from theft or damage and payout to your customers as well as for your costs. Check the small print first.
Key Man Insurance
Small business owners can protect themselves from losing a key man by purchasing key man insurance that pays a lump sum amount of money.
If something happens to your business’s main person, then you may want to make sure that you have the best form of protection available.
Often, key man insurance is taken out as part of an executive life insurance policy.
These days, several online brokerages like mykeymaninsurance.com specialize in finding the best insurance coverage at the best price.
Key Employees
It is designed to pay out a certain amount if a critical person in your company is no longer able to work. It mostly covers if due to illness, but it can often be transferred to another important employee if they quit.
Who Is Considered A Key Person?
Anyone vital to the continued operation of your business can be considered a “key person.”
This could include:
- Office managers
- Yourself (as the founder or managing director)
- Lead salesperson
- Information technology manager
This type of insurance can be offset against corporation tax, thus saving you money for what you might deem a necessary business expense.
Why You Need It
You may not think it now, but if the person in charge of the smooth operation of your technical infrastructure falls ill, you could be in big trouble.
Key man insurance gives you the assurance that you can retain or replace vital employees in the case of an emergency.
Income Replacement Insurance
Business owners usually wouldn’t think to protect their income, but more and more understand the benefits of looking into it.
Unless there is an injury, illness, or death, they don’t think about not earning a living.
It is especially relevant these days with pandemics and climate disasters affecting local regions and entire business chains worldwide.
However, it is also relevant for business owners to worry about falling ill and having to close down.
There are times when a business owner can’t work because of a disability, whether it’s short term or long term.
If you cannot work due to an injury or illness of brief duration, short-term disability insurance replaces your income.
It may be the only income source for an individual or business as if he or she is unable to work.
Why You Need It
All self-employed individuals are aware that they cannot receive sick pay while they are not working.
By investing in income replacement insurance, you will be giving yourself some breathing room if your health fails or you are otherwise unable to fulfill your duties to your business.
Workers Compensation Insurance
Workers Compensation Insurance is a type of insurance that companies can purchase to protect themselves from the cost of injuries to their employees.
Workers’ compensation is an insurance program that provides a system of benefits and services to injured employees in the course of their employment.
This can be legal or voluntary insurance depending on where you operate your business, and laws in each state determine how the system works.
However, it is wise to invest in it as it is beneficial for several reasons.
For example, you could boost morale and reduce staff turnover. This could be a real boon depending on your industry.
While workers’ compensation does not cover every job injury or illness, it does cover a wide array of on-the-job injuries and illnesses.
Why You Need It
In addition to morale, it may also protect you from legal claims if an employee receives an injury while working for you.
Summary
Business insurance includes many coverages and services needed to protect a company’s assets, customers, and employees.
When you have a business, it is essential to know that you are protected.
You want to ensure that if a fire destroys your building, if someone slips and falls on your property, or if your business is sued, you will still have the money you need to keep your business running.