If you have a small business, you know that many obligations and responsibilities come with being your boss. One responsibility, for example, is insuring the business, which may seem daunting and complicated at first glance. However, this blog post will provide information on what types of insurance are necessary for small businesses.
1) Employment Practices Liability Insurance
It protects businesses from paying out judgment claims in cases where they were negligent regarding their employees or their actions to facilitate a job offer. This type of small business insurance is NONCOMPULSORY, but those who do not carry it could face lawsuits and damages due to the lack of coverage, leading to bankruptcy.
2) Workers Compensation Insurance
It ensures companies from losses caused by injured workers. The carrier may pay for the cost of the injured employee’s medical bills and temporary replacements for the employee until they can return to work. This type of insurance is mandatory in certain states, but certain businesses may not be required to carry it, depending on their size. However, all employees must be covered by this type of small business insurance.
It covers a business from claims that they were negligent in dealing with their customers or others in the general public who have been affected by the actions within a company or its employees. It will cover losses incurred as a result of the negligence, intentional actions, or accidents that occur on their property. However, businesses that carry this type of insurance may not be covered for damages that they cause to their customers unless they have a rider on the policy.
4) Property Insurance
It covers property damage to your company’s building or office space. It also covers damages to any property within the building, such as equipment, furniture, or inventory. If your business is an office space damaged by fire or water, this policy will cover repairs or replacement costs for the damaged items. This kind of insurance is NONCOMPULSORY but should be considered if your business is an office and space for employees, customers, or clients.
5) Business Owners Policy (BOP)
It provides financial protection for the owner and his family. It also protects the business from liability claims. However, it does not cover any employees or other individuals working on behalf of the business. It will cover damage to outbuildings, on-premises property, accidents in transit, and damage to personal effects, including loss of income. Another common form of BOP is the Employment Practices Liability policy which provides coverage for injuries suffered by your employees while they are at work. This type of policy is NON-STATUTORY but is strongly recommended.
6) Homeowners Insurance
It ensures a business owner’s home from damages or losses incurred on the property. A standard homeowners policy covers fire, theft, vandalism, and other losses that can occur within the confines of the home. It also provides liability coverage to protect against injury or death caused to others on your property. If a business owner has employees working at their home, they may want to consider taking out this type of small business insurance.
Most states do not require businesses to carry all of these types of insurance. However, they do recommend it for those who have employees or valuable property related to the company. Some states may require more than one type of insurance, while others may not require any. It is wise to review your state laws to properly determine your obligation to protect yourself and your business assets.