Growing your business can be new and exciting, but be sure you have all your bases covered when it comes to potential liability. Business insurance is an essential component of running a successful business, making a basic understanding of the benefits a must.
What is Business Insurance?
Just like auto or home insurance, the goal of business insurance is to protect your assets from claims. Business insurance assists with costs pertaining to property and liability claims. Without business insurance, you could be liable for out-of-pocket costs associated with any claims or lawsuits. Business insurance acts as a barrier between you and the claimant. The coverage of business insurance is not limited to lawsuits and claims. Business insurance can cover many things, from flooding to employee injuries. You can choose which types of business insurance will be right for your business to ensure you are fully protected in case of any unforeseen events.
Importance of Business Insurance
Business insurance is important for many reasons. The first reason is that it can protect your personal assets. If something were to happen, you can have peace of mind knowing that your personal assets are protected. Personal assets include your home, personal bank accounts, and even retirement funds. Without business insurance in place, you could be obligated to pull funds from all of those accounts. Furthermore, a large lawsuit or claim could bankrupt your company if you are required to pay the funds out-of-pocket. Business insurance is critical to maintaining business continuity if a claim is filed. Additionally, business insurance is required by many governing bodies. Business insurance is required by law to protect against customer lawsuits, natural disasters, and breaches of personal information. Most states have enacted some type of regulation enforcing the purchase of business insurance. Check with your local authority to determine the specific rules and regulations.
Types of Policies
There is a multitude of different types of business insurance, from workers’ compensation to natural disaster protection. The most common types include commercial property insurance, general liability insurance, business income insurance, data breach insurance, and workers compensation insurance. Commercial property insurance is vital if you are running your business out of your home since it provides more coverage than a traditional homeowners policy. This policy can pay for repairs or replacement of business property due to fire or theft. Moreover, general liability insurance protects your business from property damage and bodily injury claims. Business income insurance aids in the replacement of lost income due to natural events or theft. Data breach insurance protects your business from claims due to stolen confidential information. Finally, workers’ compensation insurance provides claim assistance for workplace-related injuries. Workers’ compensation insurance is critical when running any type of construction, manufacturing, or any other dangerous business. There are many other types of business insurance that can be purchased for your business, but these are a few of the common ones that should be considered right away.
Coverage and Cost
What is included in the coverage of business insurance will depend on the policy. The most common aspects of your business that you should have covered are employee and customer liabilities. This would be workplace injuries on the job covered by a workers’ compensation policy. Claims for these types of injuries can result in enormous settlements that you are not going to want to pay out-out-pocket. Furthermore, natural disaster protection is not included in most standard business insurance policies, so purchasing additional coverage should be considered, especially if you live in an area that is prone to natural disasters. For example, if your business is stationed near the beach in Florida, it would be in your best interest to purchase a natural disaster insurance policy. Moreover, business insurance is not extremely costly. According to Insureon, the average cost for a general liability insurance policy is $65 a month. Professional liability insurance averages at $97 a month, workers compensation insurance at $111 a month, and a commercial umbrella policy at only $129 a month. Business insurance is a low-cost expense for a high level of potential benefits. Don’t wait until a tragic event happens to consider a business insurance policy. The risks are too high to take any chances.
Benefits of Hiring an Agent
Still confused on what is right for your business? There are many agents and consultants out there who are willing to work with you to determine the proper coverage for your specific business. Common insurance carriers, like The Hartford and Geico, will take the time to create a policy tailored to you. The initial process will include giving details about your business, such as the location, the primary purpose of the company, what you are looking to include, and any areas of concern. They will take this information and compile a personalized policy. There are many benefits of working with an agent. The first benefit is they can help you find the exact coverage you need for business. You may not know all of the policies you should have based on your industry, making working with an agent invaluable. Having the right policies will be extremely important in case any claims arise. Furthermore, another benefit of working with an agent is that they can often times bundle policies to get you the best deal. Instead of purchasing separate policies, an agent can combine policies to get you a discount. Say you need workers’ compensation and general liability insurance. Each policy may cost around $50 but bundled together your agent can offer them to you for $75. That is clear savings and more money in your pocket each month. Additionally, creating a relationship with an agent will lead to benefits long-term. Having someone to go-to for any questions or concerns can be very helpful, especially if you are not familiar with the different types of business insurance. No one knows the policies better than an agent!
Summary
Retaining business insurance is an invaluable component of any business. Business insurance helps you prepare for the worst-case scenario and ensures your personal assets are protected. The benefits are clear and the cost is low, making the decision simple: get business insurance.