No matter how large or small your business is, it’s at risk for accidents and disasters. With the right business insurance, you can protect your financial assets and physical property.
The types of business insurance vary from industry to industry, and may include liability, property, workers’ compensation or fidelity bonds. You’ll need to assess your risks and decide what coverage is appropriate for your company.
Liability
Few things are riskier than launching and running your own business. Protect your investment and guard against financial disaster with business insurance. At a minimum, every business should carry general liability and property insurance.
The specific coverages you need depend on your industry and location. A restaurant, for example, faces different risks than a law firm or an IT consultancy. You may also need workers’ compensation insurance if you have employees. Many insurers offer package policies that combine general liability and property coverage with business interruption insurance in a single policy.
Liability coverage pays for legal costs if someone is injured on your business premises or if you accidentally damage their property. It also covers medical expenses and settlement bonds or judgments awarded against you. It’s one of the most common types of small business insurance. Many small businesses need it to fulfill the terms of a lease or loan agreement.
Your premium is based on the size of your payroll and annual revenue estimates. Your industry’s accident history and your company’s safety practices also factor in. In general, the more risky your business is, the higher your premium will be. However, your insurer might lower your premium if you take steps to reduce your risk. This could include installing security cameras, getting a commercial driver’s license or taking other safety precautions.
Property
Property coverage helps pay to repair or replace a business’s physical assets, such as buildings, furniture and equipment. It can also protect a company’s inventory, including products on shelves and in storage, as well as valuable records (both electronic and hard copy). It can even help cover the cost to return a business to its pre-disaster state following damage from a covered peril like fire or lightning. This type of insurance is often included in a business owners policy or BOP, and standalone commercial property policies are available.
This type of coverage is vital for businesses that have a significant amount of expensive, specialized equipment or inventory, such as construction companies and florists. The costs to replace this property can be very high, and a loss can significantly impact a business’s ability to continue operating.
In addition to standard property coverage, there are additional options that can be added to a policy like crime insurance, which covers financial loss resulting from crimes like employee dishonesty, forgery and robbery. There is also hired and non owned auto insurance, tools of the trade insurance, liquor liability insurance and inland marine insurance that can be added to a policy. The specifics of these coverages vary greatly, and a knowledgeable independent agent can help determine which ones are right for your business.
Business Auto
Business auto coverage protects your company cars and trucks as well as those owned by employees. This specialized policy addresses unique risks of vehicles used for work by your company and may include liability insurance, uninsured/underinsured motorist coverage and medical payments (known as personal injury protection in some states). Most states require commercial auto coverage for businesses.
The specifics of your business’ needs and operations will determine if you need collision or comprehensive coverage. A good independent agent will take the time to understand your business and help you find optimal coverage for your vehicles.
Generally, a business auto policy will cover the following:
Some states allow you to add an endorsement that extends your company’s liability protection to people who drive non-company-owned or hired cars and trucks. This is called a permissive use clause and may extend to employees driving their own personal cars or trucks on business, as well as those renting or borrowing a car for business reasons. Some business owners choose to extend their liability protection under a business auto policy to include family members riding in company-owned or leased cars and trucks. This is called omnibus insureds and may be available to you at an additional cost. This type of coverage isn’t usually included in a personal auto policy, and a personal umbrella policy typically excludes it as well. assurance pro