Required Insurance
When running a business in the United States, you typically have to provide workers’ compensation insurance. This type of insurance makes sure that your employees are covered in the event that they are injured during the course of work. It also protects you because employees cannot sue you if they are injured on the job, in most cases.
Most businesses also have to pay for unemployment insurance for their employees. With this type of insurance coverage, your employees receive benefits if they lose their jobs through no direct fault of their own. Business owners have to pay a certain premium for each employee that they have.
Recommended Insurance
Besides workers compensation and unemployment, most businesses also purchase some other types of commercial insurance. One type that is commonly purchased covers the physical property of the business. For instance, this type of policy protects against damages to the business’ buildings and equipment. Since most businesses make a significant investment in infrastructure, this is a critical piece of coverage to have. If you use a loan to buy a building for your business, your lender will usually require this type of insurance. When renting a space, the landlord may require some type of coverage according to the terms of your lease.
Businesses also have to protect themselves against liability. By purchasing a liability insurance policy, business owners can shield themselves from having to pay legal settlements to customers or other businesses that sue them. For instance, if someone falls down and gets hurt inside your business, a liability policy could pay for the legal damages.
Optional Coverage
Some businesses also have need for professional indemnity insurance. This is sometimes referred to as errors and omissions insurance. With this type of insurance, you protect yourself from being sued if you make some type of mistake that negatively affects another party. For example, if you are an accountant and you accidentally forget to include data on a financial report, it could negatively impact the customer. If the customer sues you for the mistake and loss of income, this type of insurance policy will help protect you against the damage.
Insurance policies can also be purchased to protect against a loss of income. If the business has to stop operating for a certain amount of time, these policies will kick in and help pay the overhead costs during the interim. For instance, if your business location is destroyed in a storm, this portion of the policy will pay you for the lost revenue while the building is being repaired.
Instead of purchasing all of these different types of coverage separately, many business owners take the approach of buying a business owner’s policy. With a business owners policy, you can get all of these features lumped together in a single package. It has the potential to save you money on premiums and simplify the process of shopping for coverage.
Author Brandon Everts is an insurance consultant and writes for GetInsuranceQuotes.ca, a provider of Ontario high risk auto insurance, as well as commercial insurance in Canada.
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