Types of Business Insurance

It's important to make sure that your company is properly protected by all the types of business insurance necessary for complete coverage.

Business Insurance

Every business that has one or more employees must carry workers compensation insurance coverage. This type of insurance actually provides protection for the employees, not the business.

If workers experience on-the-job or work related injuries, workers compensation coverage takes care of the resulting expenses. This coverage pays for the employee's medical bills, necessary medication, and transportation to and from necessary medical appointments, time lost from work, and more.

Workers compensation rates vary based on several factors, including the level of risk associated with the particular industry the company does business in and the history of claims made by employees who work for the company.

Property insurance protects the company's assets. In order to make sure you have the right type of property insurance, it's important to share specifics about your business with your insurance agent or broker. You'll need to provide information about what type of products and services your company offers, what type of equipment and machinery you own, whether or not you carry inventory or raw materials on a regular basis, and other factors that might impact the amount and type of coverage you need.

If you own the building in which your company operates, you'll need to carry coverage on the physical structure. If you lease your office or storefront, your landlord likely carries coverage on the building itself. However, landlord insurance is limited to the actual building, so you'll need to make sure that everything in the building is covered.

Hurricane Damage

This kind of business insurance is what you'll rely on to replace items that you lose as a result of covered occurrences, which typically include burglary or robbery, fire, or weather disasters. If you live in an area prone to hurricanes or flooding, verify that your policy includes sufficient wind damage and flood coverage. If your business is located in an earthquake-prone region, verify that you are protected against this type of natural disaster.

It's also essential to make sure that your coverage limits are high enough to meet your needs. When selecting business insurance coverage limits, it's essential to consider what it would cost to replace everything you need for your company to function. It's generally best to select a policy that includes replacement value, which means the policy will pay the amount of money it takes to replace the items that you lost. Some policies are limited to depreciated value coverage, which means the policy will only pay the value of the item you lost, considering deprecation for age and use.

Business interruption insurance is one of the most important types of business insurance. This type of coverage provides funds to the company in the event that the organization loses the ability to operate for a period of time due to a fire, weather disaster, or other covered event. This type of policy replaces lost revenue when the business is inoperable, so the owner can continue to pay the lease or mortgage, insurance premiums, credit card payments, and other ongoing expenses.

Employment practices liability coverage protects companies against claims that the company or its agents acted in a manner that violates the civil rights of employees or applicants. The most comprehensive policies even provide protection against allegations brought by customers.

This kind of business insurance policy provides coverage for claims of sexual harassment, discriminatory hiring practices, wrongful termination, illegal denial of employment and other related issues. Since companies can be held liable for the actions of their employees, even when they act outside the scope of company policy, this type of protection is essential.

No matter how carefully a company operates, there is always a chance that something could go wrong with the products it produces or services it offers. Businesses that manufacture products need to carry product liability coverage, to provide protection in the event that customers experience harm as a result of using the product for its intended purpose.

Many professionals in service-oriented businesses need to carry malpractice coverage to protect themselves against claims of harm or negligence. Physicians and certified public accountants, for example, typically carry this kind of business practices liability insurance. There are many professions in which it is wise to carry a malpractice policy.

No business owner can afford to operate a company without sufficient insurance protection in place. Without sufficient protection, and the right types of business insurance coverage, a single problem or disaster could result in financial devastation. Each company has different needs, specific to location, industry, size, and other relevant factors.

It's important to cultivate a relationship with a trusted insurance agent or broker who takes the time to learn enough about your business to make sound recommendations. You should sit down with your agent once each year to review your coverage, making sure that you have sufficient protection for the current state of your business operations.

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