23
Apr
2020

Business Owners Quick Guide to Insurance

To support your business financially during hard times, you will need to buy insurance. There is a wide selection of the types of insurance you can consider for your business. While there are different types of insurance for businesses, each one of them is made to protect your business to get through financial hardships. Here are types of insurance you can consider for your business.

Life Insurance

It may not make sense to most people why life insurance is important for a business, but it is. It plays different roles to help keep your business afloat and depending on your needs you get to choose what suits you best. If you are thinking of expanding your business in the future, then you need life insurance to help finance it. Life insurance can also be used for recruitment, such that it is offered as a benefits package to entice potential employees. Also, life insurance can be used as key employee coverage. This can be used to keep the business going before replacing a key person. According to this website, if you need cash aid for your business in the future then you can use the cash accumulation component of your policy, which is also known as the savings component, instead of borrowing from external creditors to finance the business.

Property Insurance

When you own a business, you risk losing your property to theft or even damage from unexpected fires and storms. This makes property insurance essential for any business, whether you own the property or have leased it. When you have a property insurance policy, you don’t have to worry about replacing furniture, inventory, equipment, or signage unless in the case of earthquakes or floods because property insurance does not provide coverage such catastrophes. So before buying a property insurance policy, confirm if your area is prone to natural disasters. 

Professional Liability Insurance

This is also referred to as errors and omission insurance which is used to cover a business from damage that arises from irreversible mistakes from the business. For instance, if your business supplies defective products, your customers can sue you. Property liability insurance covers the expenses you incur, including charges from the lawsuit. It is important to know that property insurance policies don’t fit all industries, so your policy will be customized to suit your needs depending on your field. 

Workers’ Compensation Insurance

In a work environment, an employee might get injured or experience a fatal accident. Workers’ compensation insurance is used to cover medical expenses if an accident happens when they are in their line of duty. Also, if the employee dies as a result of an accident, the family of the deceased employee receives the proceeds from the policy. And this does not apply only when the work is high-risk because even with a low-risk job, a simple fall may cause a serious injury. 

Product Liability Insurance

If your business deals with manufacturing products, then you should think of buying a product liability insurance policy. Even with the strictest measures to ensure that you produce quality and effective products, a simple mistake can have a negative effect on your business. If your product causes damage, then your business might be sued, and this will eat up a lot of your business finances. As such, product liability insurance is used to cover such expenses whenever they arise along the way. 

Home-Based Businesses

A lot of people have started their businesses in their homes before acquiring a commercial space. Such businesses are not covered by homeowner’s policies so it is good to have an additional insurance policy in case anything happens. You don’t want to risk losing your business in the future, so it is advisable to take precautionary measures.

Business Interruption Insurance

When a natural disaster hits, operations for your business will likely come to a halt, especially for those which require a physical location to operate. To prevent losses during such a time, you need to acquire a business interruption insurance policy that will cover the losses you will incur during that period. This can also be used to cover expenses from a lawsuit, so ensure to check with your insurer for available packages if you already have a functional business. 

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