It does not matter whether you run a local coffee store or you have a nationwide courier company; you need to make sure you have the right insurance in place to protect the future of your business.
Insurance is one area where you cannot afford to cut corners. However, there are too many businesses that do not have sufficient coverage or have taken out the wrong policy. To make sure you do not fall into this category, we are going to take a look at the most important insurance plans for businesses to consider:
1. General liability insurance
There is only one place to begin, and this is with general liability insurance. This is sometimes referred to as commercial liability insurance or business liability insurance.
But what is it? General liability insurance for businesses is designed to cover your company if you are faced with a claim for bodily injury, the medical costs linked with this, and damage to a property, which happened as a consequence of your company operations.
Let’s take a look at the different elements of this cover in further detail:
- Copyright, slander, and libel – Let’s say that one of your employees shares unflattering details about a customer with another person working in the same industry. If this ends up getting back to the client, they may sue for slander. General liability insurance will cover the expense of this.
- Tenants legal liability – If you currently rent your business premises, you can be covered for any damage that happens.
- Product liability – If one of your products causes illness or injury to a customer, your general liability insurance will cover your legal expenses.
- Third-party property damage – Let’s say you offer landscaping services and you accidentally break something in the person’s garden or on their property, general liability insurance covers this.
- Third-party bodily injury – If someone is injured in your store or at your business premises, and files a claim against you for the damages, general liability insurance will cover the medical expenses.
2. Business income insurance
Another type of business insurance that you may want to consider is business income insurance. This can help if you find yourself in a situation where you cannot run your business because of covered property damage. You can replace the income lost with this plan.
You can use the payout to help you with any ongoing expenses you face, such as payroll, utility bills, or rent. This type of insurance sometimes goes by the name of business interruption insurance as well. The covered perils that tend to be included in business interruption insurance include lightning, falling objects, wind, fire, and theft.
Ultimately, the benefits here lie in the fact that you can continue to make your lease and rent payments even if your business is not operating. Moreover, if your location is no longer suitable following a disaster, you will be able to relocate elsewhere so you can keep running your business and generating revenue.
3. Commercial property insurance
As you may have gathered by the name, commercial property insurance helps to protect either your rented or owned building and everything that is inside it to run your company, i.e. all of your equipment.
It is important to note that, unlike the previous plan, this insurance will not provide you with cover if you experience damage due to an earthquake or flooding. There are specific insurance policies that are in place for those that live in areas that are at a high risk of flooding.
You can get umbrella policies here that will cover building insurance, as well as employers’ liability insurance, property owner, loss of rent, and landlord’s contents. This is why it is important to make sure you spend some time assessing the different options on the market so you can find the best one for you.
4. Data breach insurance
You do not need us to tell you that data breach incidents are on the increase. It seems that a day does not pass without the news of a cyber attack or breach that has happened.
One thing that is important to point out here is that every business is at risk. It does not matter if you have one customer or one million, you hold sensitive data, which cybercriminals want to get their hands on. This is why it is imperative to make sure that you have stringent security measures in place to protect your business and customers.
Not only this but you need to make sure you take out data breach insurance as well. Data breach insurance will help your company respond effectively if personally identifiable information ends up getting stolen or lost.
You may also see this referred to as “cyber insurance” by some insurance agencies.
Data breach insurance will help you pay your costs in terms of notifying individuals who have been impacted, getting to the bottom of what has happened and rectifying the issue, offering identity theft monitoring services, and creating public relations campaigns so that you can rebuild relationships with your customers.
This is imperative because data breaches can be very challenging to get back from. A lot of businesses have had to close their doors permanently due to the severe costs and the lack of trust that arises after a data breach.
5. Workers’ compensation insurance
Another type of insurance that you should consider is workers’ compensation insurance. This plan is designed to give your employees benefits should they get sick or suffer an injury from their job.
In most states, it is a legal requirement to have this type of insurance in place so that you can make sure your employees are protected should the worst happen. If you do not comply with the law in your state regarding this, you can face criminal charges, penalties, and fines.
The benefits this plan can offer include paying for ongoing care for your employees, such as physical therapy, as well as replacing the majority of their wages if they need to miss work to recover and paying for their medical bills.
If someone loses their life because of an injury that has happened in the workplace, workers’ compensation insurance will cover funeral costs.
6. Commercial auto insurance
If you have any vehicles at your business, you will definitely need to have commercial auto insurance in place. This type of policy will help to protect you and your workforce while they are on the road.
Whether you have one company vehicle or a fleet of thousands, you need to have insurance while on the roads. Commercial auto insurance is designed specifically with businesses in mind.
This sort of policy will help in terms of covering bodily injury claims and property damage claims that may arise if any accident has happened and one of your corporate vehicles was involved.
Schmicko says that this is vital because a personal car insurance plan is not going to cover third-party claims in an accident you cause if you are driving a vehicle that is owned by a business.
7. Professional liability insurance
Aside from the different insurance plans that we have mentioned so far, we would also recommend considering professional liability insurance. This policy will help cover lawsuits whereby the claimant is considering that you made an error in the service you provided.
You may sometimes see these policies referred to as errors and omissions (E&O) insurance.
According to one of the leaders of car cleaning services, ultimately, this type of insurance coverage will protect your business and your bottom line from customer claims of unsatisfactory, incomplete, or late work. Accusations like this can result in expensive lawsuits, which no business wants hanging over them. In situations like this, professional liability insurance can be a huge relief.
8. Commercial umbrella insurance
Last but not least, we have commercial umbrella insurance. This type of policy will extend the coverage limits for some of the liability policies you have in place.
So, what this means is that if you make a claim and it exceeds the limit you have on your policy, your umbrella insurance plan will cover the difference.
Not all businesses take out this sort of insurance plan, so you need to consider whether or not it makes viable sense for your situation, but it is definitely worth thinking about.
Final words on the best insurance policies for companies to consider
So there you have it: the top insurance policies that businesses should consider. The importance of having quality insurance plans in place to protect your business should not be underestimated.
While you can use the above policies as a guideline, every business is different and will have different requirements, so you always need to consider this when buying insurance for your company. You may want to consider working with a specialist insurance broker if you are unsure.