A business is at risk the moment it is launched. As soon as the first employee is hired or a company car is purchased, that risk gets even higher.
Just one lawsuit or catastrophic event can topple your business before it even begins to turn a profit. That’s why it’s vital to make sure all your bases are covered with the right insurance plans.
Let’s take a look at seven types of insurance that you need to purchase for your business… if you haven’t already.
1. Property Insurance
Property insurance is vital – whether your business leases or owns its space. Property insurance will cover damages or loss to signage, inventory, furniture, and equipment if they get stolen or if there is a fire or storm.
Bear in mind that natural disasters such as earthquakes and floods are not typically covered under standard property insurance – so if your business is in a high-risk area, you may need to look into getting a policy with extra coverage.
2. Life Insurance
Some types of Insurance don’t just protect your business; they protect your employees as well. Consider offering your employees life insurance to protect their families if they fall ill or pass away.
If your business is small and only has a few employees, you may not qualify for a group life scheme that provides death-in-service benefits – but you can purchase relevant life insurance.
Relevant life insurance is paid for by the business and will provide your employees with free life insurance that can be offset against corporation tax– more information here.
3. Workers’ Compensation Insurance
As soon as the first employee in the business is hired, worker’s compensation insurance needs to be added to your business’ insurance policy.
Worker’s compensation insurance covers medical treatment for the employee, as well as benefits for death and disability if the employee becomes injured or dies while performing his or her duties.
Worker’s compensation insurance is vital – even if the employee is seemingly low-risk. Medical conditions like carpal tunnel syndrome or accidents like slip-and-fall can lead to expensive claims.
4. Professional Liability Insurance
Professional liability insurance – also known as errors and omissions insurance (E&O) – will protect the business from claims of negligence that result from mistakes or failures to perform.
It’s important to note, however, that there is no standard or “one size fits all” professional liability policy –the details will be tailored to your business and largely depend on your industry.
5. Product Liability Insurance
Product liability insurance is essential if your business produces products that are sold in the general market. Businesses can (and should) do everything to ensure that their products are safe, however, there is always the risk of a lawsuit resulting from damages caused by a product.
Product liability insurance protects businesses from lawsuits, and policies are tailored depending on what products are being sold.
6. Vehicle Insurance
If your business utilizes company vehicles, the vehicles need to be insured in case an accident occurs. Vehicle insurance will protect the business against liability. Third-party vehicle insurance is essential, but comprehensive plans will also cover the damage to the vehicle.
If employees are using their own cars in a business capacity, accidents will be covered by their own personal insurance policies except if they are delivering services or goods for a fee – this also applies to delivery personnel.
7. Business Interruption Insurance
In the event of a disaster, your business operations can be interrupted. Business interruption insurance protects businesses against lost income due to the inability to work in the office, manufacture products, make sales calls, etc.
Business interruption insurance is particularly helpful for businesses that operate in a physical location – such as retail stores or food services. Business interruption insurance ensures that the business is compensated for lost income during power outages and catastrophic events.
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