Business owners embrace the risks of entrepreneurship and they take proactive measures to manage such risks to ensure sustainable profits and growth. Buying insurance is one of the smartest ways to manage the risks associated with running a business if you don’t want such risks to mess up the operations or the survival of your business.
Interestingly, for a fledging or struggling business, paying insurance premiums and deductibles might look like a needless waste of money especially when the profit margin is slim. Hence, many business owners tend to buy the minimum insurance required by the law and they’ll choose to play the odds on other unique risks associated with their business.
However, playing the odds on risks tend is dangerous because accidents tend to happen when you are most vulnerable without insurance coverage. This piece provides practical insight into how you can identify the most important insurance coverage to buy for your business.
General Liability Insurance
If you rent/lease your business space or office, your landlord will most likely insist that you have general liability insurance as part of the leasing agreement. General liability insurance will protect your products, business operations, and even events within your business premises. General liability insurance can protect you from liability lawsuits that could general bad press for your business or distract you from your core operations. For instance, a restaurant with general liability insurance will be covered when someone falls and breaks a leg in your restaurant or when someone gets food poisoning.
Worker’s compensation insurance
The law requires that any business with employees have worker’s compensation insurance – this is not debatable; thankfully, each state regulates the pricing of this insurance to avoid exploitation. Worker’s comp provides relief in case of accidents, time-off due to accidents, or even death in the line of work. More so, you also need to ensure that your subcontractors have worker’s compensation policies and you should ask for their certificate of insurance in order to be on the safer side. The government will hold you liable if you can’t prove that your subcontractors are insured.
Auto insurance
You should buy commercial auto insurance if you have a vehicle(s) used by yourself or your workers to run business errands. This auto insurance protects your business from liability in the event that the vehicle is involved in an accident and someone was hurt or property was damaged. Proactive business owners should also consider buying non-owned or hired automobile liability coverage in addition to their auto insurance. The hired auto option will also provide coverage when you or your workers borrow a car to run business errands, and there was an accident, and property was damaged or someone was hurt.
Errors and Omissions Insurance
Many people who offer consulting services often feel that they don’t necessarily need insurance since they are not selling “tangible” products/services. However, you could find yourself fighting a lengthy legal battle if you consult on a project and the project fails. Having errors and omissions insurance however can provide with professional liability insurance for up to $1 million on your consulting services. The best part is that having errors and omissions insurance will cover the cost of legal and defense costs in the event that someone files a lawsuit against your consulting practice.
