25% of businesses that encounter a disaster—whether it be a fire or a lawsuit—never reopen their doors. It’s a sobering statistic, and one that should leave business owners questioning their own insurance coverage. Whether you run a small business or a large corporation, having business insurance is a must for protection and added peace of mind in the event of a disaster. Unfortunately, many business owners lack an understanding of this type of coverage and don’t know the first steps to protecting their own businesses.
What is Business Insurance?
Business insurance is a broad term used to describe a variety of coverage options available to business owners that can protect them from major financial loss in a variety of circumstances. Specifically, business insurance coverage can come in the form of:
- liability coverage
- property coverage
- company vehicle coverage
There are a number of specific circumstances in which a business insurance policy can kick in and be put to use. For instance, business insurance that includes liability coverage will protect your business in the event that you’re sued for any reason. Perhaps a customer slips and falls in your store and brings forth a lawsuit as a result; business liability coverage will pay for your legal fees and any settlement awards that result. This type of coverage may also include workers compensation, which will pay for lost wages, medical expenses, and other related costs if an employee is injured on the job.
With business property coverage, on the other hand, your commercial property is protected from any number of disasters, ranging from vandalism, fire, and natural disaster (depending on your coverage). This is an important type of coverage to have for any business with a physical storefront or office location. This type of coverage applies to properties that are either rented or owed outright.
Company vehicle coverage is another type of insurance to have for any business that has company vehicles. Specifically, business vehicle coverage offers protection for drivers of the vehicle and others on the road, in addition to the vehicle itself. In the event of an accident or damage to the vehicle, coverage will kick in and pay for damages, related medical expenses, and the like.
Do You Need Coverage?
Some business owners out there find themselves wondering if they really need business insurance coverage. The simple answer that applies to just about any imaginable situation is “yes.” If you run a business and would be financially strained in the event of a disaster, you need business insurance. Having this coverage will help give you greater peace of mind as a business owner in addition to protecting your assets, property, and even your employees.
Choosing the Right Coverage
The time to start shopping for business insurance coverage isn’t after your business has experienced a disaster; if you don’t have coverage, now is the time to start shopping for it—and you should do so as soon as possible. But what if you don’t know what type of coverage you need or what to look for in a policy? Fortunately, there are some general guidelines to follow that will help make shopping for business insurance easier.
Start by considering what types of coverage would apply to your business’s unique situation. For instance, do you have company vehicles? If so, then business vehicle coverage is a must, especially if you have employees who have access to your company vehicles on a regular basis. Furthermore, if your company has a physical location, you’ll also want to have property insurance. Even if you run your business out of your home, it’s worth looking into, as your home insurance policy may not cover your business-related property.
All companies need some form of liability insurance; if you have employees, then coverage that includes workers compensation is a must. Even if you don’t have employees, however, you should have what’s known as errors and omissions coverage, which protects you in the event that any customer or client tries to sue you for negligence.
Once you know what types of business insurance you need, it’s a matter of determining your coverage amounts and shopping around with various insurance companies to find the best value.
Overall, business insurance is an absolute must for all companies, no matter how big or small. Be sure to keep these tips and guidelines in mind as you shop for the right policy to protect your business. From there, you can operate your business with greater confidence and peace of mind.