Business insurance is a type of coverage that companies purchase to protect themselves from potential damages, lawsuits, and contract disputes. General liability insurance is a must-have for any business, as it covers legal costs due to accidents or injuries caused by the company. Product liability insurance is also important for companies that sell products, as it helps protect them from any damage caused by defective items. Professional liability insurance is essential for businesses that offer professional services, such as doctors, IT consultants, and real estate agents.
Property insurance is also necessary for businesses with physical assets. This type of policy can range from basic to comprehensive, and the cost of premiums is based on estimated payroll rather than actual wages paid. Comprehensive policies usually cover the risks faced by small businesses, while policies for specific risks are taken out when there is a high risk of danger in a given area. Employment Practices Liability Insurance (EPLI) is important for businesses with employees, as it covers legal costs if an employee files a lawsuit against the company for wrongful termination, sexual harassment, discrimination, negligent evaluation, breach of employment contract, mismanagement of employee benefits, or unlawful imposition of emotional distress.
If your company is structured as an LLC, you may be able to opt for lower liability insurance. If you own a car or van and only use it occasionally for work purposes, you may be able to get by with standard personal car insurance designated for commercial use. However, it's important to make sure that you don't buy too much or too little coverage. Cyber attack expenses are not usually covered by traditional business insurance policies. Disability insurance is similar to workers' compensation in that it temporarily covers an employee's lost wages if they are unable to work due to a disability. Group insurance does not refer to the coverages that a business owner would have to protect himself, his business and his property. It's important to periodically review your company's needs and current coverage in order to make sure that you have the right type of business insurance for your business.
