Most entrepreneurs know they need to make hundreds of decisions during the startup process. They need to decide everything from employees, distribution, locations and manufacturing. Another choice that goes under the radar is what type of business insurance you need.
However, business insurance is a necessary step to protect your company from unexpected hurdles such as lawsuits, accidents and even natural disasters.
Most common forms of business insurance
There are several types of insurance for companies, but not every type works for every business. You need to select the right insurance plan for based on your specific business:
- General Liability – An insurance plan for any business because it protects against financial loss due to bodily injury, property damage, libel, medical expenses, defending lawsuits, etc.
- Product Liability – A specific plan that covers businesses that manufacture, wholesale, distribute and retail a product. It protects against losses as a result of defective products.
- Commercial Property Liability – This covers your business from any losses because of damage to company property. For example, if there was a fire, smoke or civil disobedience to your physical property or assets.
- Professional Liability – A plan that helps businesses who provide services to customers. The coverage protects against losses due to malpractice, errors or negligence. It’s helpful for construction, contractors and even fitness professionals.
- Business owner’s policy – An insurance plan that combines all the typical insurance coverage into one bundle. It’s incredibly useful for small business owners and businesses run out of an owner’s home.
The company needs to evaluate what coverage is necessary and decide the right coverage for your business. Once you choose your insurance plan, you will work with an agent to assess your risks and find the plan that fits your needs. It’s important to note that most companies re-evaluate their policies each year to ensure they have the right coverage.
As a company, you will need to protect the company, yourself and your employees through these insurance plans. Make sure you take your time and work with a team to find the right plan for your specific needs.