If you are opening a new small business, then you probably have a lot on your mind – market research, marketing, billing, admin, covering your overheads and making sure that you take home enough to pay your bills. It all adds up! One thing that a lot of business owners don’t think about is insurance. Depending on the nature of your business, you may need several policies. Here is a quick overview of the main kinds of insurance – and who might need them.
General Liability Insurance
This is a general policy that will cover you, your employees and the business itself for a broad range of issues, including damage to property, bodily injury, slander, libel, medical expenses, settlements and other potential claims or liabilities. This kind of insurance is often marketed as being a ‘catch all’, and it will frequently be sold with add-ons, for example, you could add accounts receivable protection if you are concerned that delinquent clients could be a problem for your businesses. It is important that you read the policy carefully, understand exactly what you will be getting from it, and keep it up to date. Many bigger companies will want to see the general liability policy that you have before they work with you, so it’s a useful policy to have. There are benefits to having specific policies on top of that, though both in terms of cost and the comprehensiveness of the cover that you will get. Do your homework and make sure you get the right industry specific policies too.
Most businesses should look at property insurance. Whether you have your own commercial real estate, or you are running a home-based business, it is a good idea to make sure that the assets are protected. Property insurance covers the fixtures, furniture and equipment, so it may already be a part of your general insurance. Note that buildings themselves are usually covered by Buildings Insurance specifically, not a more general property/contents policy. In addition, if you are a small business owner that works from home, then your home insurance may not be adequate. Do not assume that any assets that are for your business will be covered by your home policy. Call the policy provider and ask them if you will need to add some additional riders or take out a separate policy for business insurance for a Florida company Don’t wait, and hope that you will be able to make a claim if necessary.
Product Liability Insurance
Product insurance is intended for businesses that make, distribute and sell products. It is there to protect against the financial loss that may be incurred if someone claims after a defective product cause harm or injury to them. This is often added onto a standard general business insurance policy, and it is a must have for any business that produces or sells products.
Professional Liability Insurance
This is a policy that protects you against claims relating to errors, negligence or malpractice. It can help you to sleep easy with the knowledge that they are not at risk because a disgruntled customer was unhappy with the advice or service they were given. It is often used by businesses that provide financial advice, or health advice. Indeed, in most states physicians and other similar professionals are required by law to have this kind of insurance.
There are some other niche policies that may be worth considering for certain kinds of business owner. For example, a martial arts school may take out policies for the instructors, and then additional ‘member to member’ policies to protect their members so that if one member were to be injured by another in a situation where the school and the instructors were not at fault, then the members themselves will not have to worry about the risk of being taken to court.
Another area where insurance may be necessary is employer’s liability insurance. This covers potential claims that employees might make, for example if an employee becomes sick or is injured through a work-related incident. It is important that you check the law in your state, because employer’s liability is a complex issue. Some states do not require that small businesses have this insurance, especially if the only people they employ are direct family members. There are, however, some areas where even a volunteer is considered to be an employee, and all employers must be protected. Employment law differs massively across the country too, with everything from ‘employment at will’ to rules that favor the employee and put a lot of protections in place for stability of income and employment.
Choosing Your Insurance
No-one likes to spend money on bills that they do not feel an immediate benefit from – but it is important to understand how valuable it can be to have insurance. In the rare instances that you end up needing to make a claim, insurance can genuinely save your company. Claims for personal injury can be tens of thousands of dollars, if not more. Loss of equipment for your business or damage to your stock could cripple your company. Insurance is there to bail you out and to ensure that you get the support you need at the time that you need it. If you claim on your insurance even once then it will pay for itself many times over. Remember that, and shop around for a policy that includes everything you need – and that has clear terms that will allow you to claim if necessary.
Make sure that you have copies of all of your insurance policies and that you know what they can be used for. Set reminders for a month or so before the policy is due to renew, and shop around each year to make sure that you are still getting a good deal. Insurance doesn’t have to be expensive – and it could be a lifesaver for your company.