5 Types of Insurance Every Small Business Should Have
As a small business owner or maybe someone considering starting their business, you will know how much work is involved. With so many avenues to explore, insuring your business can often be overlooked, sometimes with costly consequences.
Whatever your type of business, whether it is home based, office based or even mobile, there are 5 forms of insurance for small business that you really need to put in place to protect yourself and any investment that you have made.
What you need to look at is your specific business needs; this could be anything from insuring cars used for work, looking at where you operate from, how many employees you have and even the products that you supply. With this in mind, here are 5 forms of insurance that no small business should be without.
Professional Indemnity Insurance
Professional Indemnity Insurance, also known as errors and omissions in the US, is one form of insurance that you don’t want to risk being without. Professional indemnity insurance protects your company’s advice and/or products for legal costs if a negligence claim has been made by a customer. Whatever sector of business you are in, you will be offering some form of product to your customers, hairdressers cut hair, lawyers give legal advice etc. As long as you are offering your customers something, you are vulnerable to your products going wrong, breaking or not working in the manner you intended. This is the potential cause for legal action to be brought against you and without this insurance in place it will fall on you to make all the payments.
General Liability Insurance
Whatever and wherever you business is run from needs to have a general insurance policy in place to cover a wide manner of eventualities. This can be anything from accidental injury to you or an employee, or even damages to your property. General liability insurance will cover all these things to a certain extent.
A common mistake made, is that many small business owners believe that this is enough to cover for all emergencies within their company. This is true but only to a certain extent and doesn’t cover more obscure issues that may be specific to the type of business you own. So, to start your business off on the right foot, this is one of the first policies you need to take out as a general, basic form of protection. Be aware that if you are the business owner and you own the commercial property, this cover will not be sufficient for the property, you will need to get extra landlord Insurance quotes.
Business Owners Policy
This is another general, good all round, form of insurance that is highly recommended in order to protect you, the business owner. Slightly different to general liability insurance, business owners insurance covers you personally, against business interruption, general vehicle coverage and crime. As an example, if your business relies on the internet, such as a marketing company or an ecommerce site, and your website goes down for a week, you can make a claim to cover the costs of losses.
The key to getting the right business owners insurance is to change the policy to suit your businesses needs, in general you can take out areas of cover you don’t need and add in specifics that you do need.
Commercial Auto Insurance
As mentioned in the business owner’s policy breakdown, commercial vehicle cover can be added to this if you have one vehicle, but if you have more than one vehicle or vans, then this is the best way to secure them against damage. This form of insurance will cover your work vehicles against damages and theft, but it also includes cover for your employees whilst inside the car. Another nice point to note is that even if your company doesn’t own the vehicle being used for your business, like an employee using their own car, you are still covered for the worst case scenario as the drivers insurance may not cover all the costs.
Employers Liability Insurance
Finally one of the policies that in many parts of the world is a legal requirement, employees liability insurance. This is a must if you employee just one person as it will cover you against any harm or illness that comes to that person whilst on your premises and this does include a home based office. The only people who will not be covered by this policy are employees that are directly related to you, i.e brother or spouse etc. When taking out this policy, be aware that you may need to have a health and safety inspection including your place of business, vehicles used for work purposes and equipment you use. This certificate should then be clearly displayed in your workplace, if it is not you may not be able to make a claim.
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