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What Does Business Insurance Cover?

Owning your own business means having a lot of responsibilities. You have to develop your product or service, of course. Plus, you need to find affordable vendors, a location to work, employees and keep the books up to date. There is a lot to do and a lot to know. Most entrepreneurs go into business to make money and to work for themselves. They may not know about another important aspect of any business: insurance. 

Business insurance helps to protect your company against legal liability, property damage, employee risk, and much more. You do not want to skimp on your insurance to save money because the consequences could be catastrophic. For example, if your business is sued, you could find yourself going bankrupt just from your legal costs alone, even if you don’t have to pay any damages in the end. A building that is struck by lightning or is vandalized will also need to be repaired, which can be a massive cost. Insurance helps you sleep at night knowing your business is protected. Here are the most common things that your business insurance policy will cover. 

General Liability Insurance

General liability insurance protects you from being sued in various situations. For example, a customer could come to your store and trip on a frayed rug or a wet floor. If they sustained injuries, they may seek compensation from you to recover their costs. This could be medical bills, lost wages, pain and suffering, and rehabilitation expenses. If you don’t have insurance, you may have to pay out of pocket for all of these. 

General liability will also cover your legal expenses if taken to court. Your lawyers and witnesses can be covered, and if you are ordered to pay damages, that can be compensated as well. Lawsuits can last for years in some cases. That means that you could be paying for lawyers and medical bills for a long time before a resolution.

As our world becomes more and more digital over time, there is a good chance that your business stores data in the cloud. If there is a data breach, you can also be sued for damages if someone suffers a loss. You can have cyber liability added to your coverage to help with such a lawsuit as well. To avoid sinking your business, you must have liability insurance to provide protection. 

Workers’ Compensation Insurance

Every state but one requires businesses to have workers’ compensation coverage. That means there is an excellent chance you will need it too. In fact, some states also require sole proprietorship businesses to have workers’ comp, so don’t assume that you don’t have to have it if you are the only “employee” of your company. Check with your local authorities to make sure. 

Workers’ compensation provides compensation to employees who are injured or have suffered an illness because of their job. If they have to miss work, they will lose out on wages, plus they will have medical bills and other expenses related to recovery. Workers’ compensation ensures that they will have the funds they need to heal and recover without having to stress about money and paying the bills. 

As an employer, having workers’ compensation in place also protects you. No matter whose fault the actual injury or illness is, it will happen because your employees are working to help your business. That means that you are under an obligation to make sure their needs are covered. Without workers’ comp, you will be on the hook for those costs, which can get up into the hundreds of thousands of dollars. 

Commercial Property Insurance

Every business has some sort of property or equipment. It could be the storefront where you sell your goods. It could be an office space where your team checks in to work every day. It could even be your couch or a home office. Wherever you have a property that is owned or rented by your business, you need to have commercial property insurance. 

If your property is damaged or destroyed in some way, it will have a significant impact on your business. For example, if a hurricane smashes your store’s windows and damages all of your merchandise, you will need time to repair and get more product in. This can cost a lot of money. The same goes if someone vandalizes your property or your inventory. 

Even if you work from home, you still need protection. For example, if something happens to your home, your personal policy may not cover any on-site business-related spaces or equipment. That could be inventory, your laptop, or any equipment you might use for your business. Property insurance can also include compensation to help you keep running your business or keep paying bills and salaries until you are ready to reopen. 

Commercial Automobile Insurance

Do you have a fleet of vehicles, or even just one? Then you will need commercial automobile insurance. Even if you use your personal vehicle, your insurance policy most likely does not cover commercial usage. There are several scenarios where this might be true. For example, if you are moving equipment between job sites with your personal truck, then you are taking on added risk. The equipment could get damaged or fall off your vehicle and cause damage or injury. In addition, if you deliver your products to households with your own vehicle, then you will need commercial coverage as well. 

When it comes to automobile insurance, it can protect your business in several ways. First, it can shield you from the costs associated with a collision that damages property or causes injury or death. Depending on the facts of the incident, these costs could be substantial. Plus, having insurance will protect you from getting caught without it. If you don’t have the right insurance and one of your vehicles is pulled over, you could be facing massive fines and your vehicles being pulled off the road. This will cause an interruption to your business operations and cost you money that way. 

If you own a business, you are taking on all the risk. If it fails, then it’s your investment that will be lost. Therefore, there is no need to add more risk by avoiding paying for insurance. Instead, make sure that you get the right business insurance for your company to protect you from all potential risks. That way, you can rest your head knowing that your business is protected from outside harm so that you can focus on bringing in revenue.