From the day you start a business, you are exposed to certain risks. A single lawsuit or calamity is enough to destroy a small business even before it gets the chance to unfurl its wings. Here is why it is important to have the right insurance in place.
Providing secure workplace is one of the most important responsibilities of an employer. However, you can’t deny the fact that injuries or eventualities don’t. In order to face these, you need a type of insurance that mitigates any financial liabilities arising out of these incidents. Fortunately, every business can now utilize certain types of insurance to allay expenses stemming from these eventualities. Here are a few types of insurance that need your attention if you, too, own a business:
- Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, Professional Liability Insurance covers your business against claims arising out of loss or harm due to negligence or damages/mistakes or failure in delivering the services satisfactorily. You can customise this policy as per the needs of your business as there is no one-size-fits-all policy for liability insurance.
- Property Insurance
Whether you own or lease a space for business, property insurance is a must. This insurance offers utmost protection to equipment, building, furniture and inventory in the event of fire, theft or any other catastrophic event. However, flood and earthquake are not covered under a basic property insurance policy. If your location is prone to these, then check with your insurer for a comprehensive policy that includes ample coverage for the same.
- Workers’ Compensation Insurance
Once you’ve appointed a certain number of employees, the next step is to add Worker’s Compensation insurance in your corporate insurance portfolio. This policy covers you for medical treatment expenses, disability of a worker, and death benefits (in case of an accidental death) while working. Even if it is an apparently low-risk work, medical conditions or slip-and-fall injuries can lead to pricey claim at times. This insurance helps the employer by covering legal liability expenses paid as a compensation for bodily injuries, disability or death throughout the course of employment.
- Vehicle Insurance
If vehicles are used for business purposes, ensure that all of them are fully insured in order to avoid liability claims arising out of an accident. While third-party insurance will cover you for liability claims, a comprehensive policy covers the vehicle for own damages as well. In case employees are using their personal vehicles, their personal insurance should cover them in the event of an accident. However, if the vehicle is used for public/corporate interests or delivering services for free, which includes delivery personnel, no coverage will be offered.
- Home-based businesses
Many people prefer using their own house to start a business. Sadly, the policy owned by the owner is not likely to cover home-based businesses in the same way commercial property insurance does. In this regard, you can ask your insurer to suggest additional add-on or coverage in order to offer sufficient protection to your business in the event of a crisis.
With a right type of insurance in place, you can smartly avoid financial losses caused by a disastrous event or lawsuit. However, it is recommended to take expert advice before zeroing on a plan. Only buy after analysing your type of business and its needs and put those plans in motion accordingly.
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