What Types of Insurance does a Small Business Need?
Insurance is there to protect us from life’s unexpected calamities. In the home, insurance steps in when a storm damages the roof or you spill red paint on a white carpet. Away from the home, insurance is a godsend when someone bumps your car or you skid on black ice and hit a tree. But what about in business – what types of insurance do small business owners need to protect their assets and livelihood?
General Liability Insurance
General liability insurance is a must-have policy for any business. This type of insurance is a catch-all policy that protects you from claims on most fronts. For example, if one of your products causes injury or damage to a third party or their property, general liability insurance will cover the cost of a legal defense and pay out if damages are awarded.
Professional Liability Insurance
Everyone makes mistakes. Unfortunately, if you make a catastrophic error whilst offering your professional services, general liability insurance won’t cover you. Say, for example, you are an accountant and one of your clients is paying you to submit their tax return, but you forget. The client is then fined for missing the filing deadline and decides to sue you as a result. Not much fun for you unless you have insurance in place.
Key Man Insurance
Could your business survive if you or a co-director became seriously ill, or worse still, died? Key Man insurance is designed to protect the business from the loss of a ‘key’ person. Usually a small business is dependent on several key people, and without their input, the business would fail. Key Man insurance pays out so that the business can continue trading until a replacement is found.
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Property Insurance
Whether you rent or own a property, insurance is essential. If the business rents commercial space, contents insurance will protect stock and equipment from fire, flood, theft and accidental damage (amongst other things). Should you own the premises, buildings insurance is also very important. After all, what would happen if the building burned to the ground and you lost everything? With adequate insurance in place, at least you could continue trading so all would not be lost.
Worker’s Compensation Insurance
Sometimes accidents happen and an employee is injured in the workplace. Obviously nobody wants this to happen – least of all the employee – but if your workers are covered by a workers insurance policy, they will receive a replacement wage and medical benefits until they are fit enough to return to work. Workers Compensation Insurance also protects the employer, as workers who sign up for Workers Compensation sign away their rights to claim against the employer should an accident occur.
Data Breach Insurance
Does your business store confidential information on computers or in files? Lots of businesses, from accountants to medical practitioners, store sensitive data. If a breach occurs, whether by accident or malicious intent, Data Breach insurance will protect your business from claims resulting from the loss.
For an idea of general liability insurance cost, or any other insurance for that matter, make sure you talk to an independent broker.
Guest Post: Keith Sullivan
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