5 Essential Types of Business Insurance Every Entrepreneur Needs
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Contents
Introduction
As a business owner, you have the responsibility to protect your assets and ensure the safety of both your employees and customers. This is why every entrepreneur needs some type of business insurance coverage. While no one wants to spend money on something that’s not directly related to their core business functions, there are many reasons why every entrepreneur should consider investing in at least these five essential types of insurance policies: general liability, professional liability (errors and omissions), commercial auto, workers’ compensation and umbrella/excess liability coverage.
General Liability Insurance
General liability insurance is a type of business insurance that covers you if you’re sued or held liable for someone else’s injuries or property damage. If a customer trips and falls in your store, general liability will cover their medical bills and any legal fees they incur as a result of the accident. It also protects you from lawsuits related to products sold through your business, such as defective merchandise or food poisoning cases.
General liability costs $500-$1000 per year, depending on how much coverage you need–but it can be worth every penny if something goes wrong!
Professional Liability Insurance
Professional liability insurance covers the cost of legal defense and/or settlement of claims against you or your company. It covers claims of negligence, errors and omissions, breach of contract, etc. Professional liability insurance is a requirement for most professional licenses.
If you are an entrepreneur who sells a service (e.g., lawyer, accountant) or uses licensed professionals to deliver your product (e.g., photographer), then this type of insurance is essential to protect yourself from lawsuits related to the services provided by those individuals under your employ or at your direction as an owner/partner/shareholder
Commercial Auto Insurance
Commercial auto insurance protects you in case of an accident. It also covers damage to your business vehicle and can include coverage for vehicles used by your employees.
Even if you don’t own a car, commercial auto insurance is important because it covers any vehicle that’s used for business purposes–and even if you don’t use the car often, accidents can happen at any time. If an employee is driving one of these cars and gets into an accident, their personal auto policy won’t apply (since it only covers personal use).
Workers’ Compensation Insurance
Workers’ compensation insurance is a mandatory business expense in many states. It covers employees who are injured on the job and allows you to avoid lawsuits.
If you’re an employer, workers’ compensation insurance will protect your business from costly lawsuits if one of your employees gets hurt while working for you. The coverage also allows injured workers to receive medical treatment without having to worry about paying bills themselves or suing the company they work for.
Umbrella/Excess Liability Coverage
While you can use umbrella insurance to cover any type of liability claim, it’s not meant for everyday business expenses. Instead, this type of policy should be used to protect your assets in the event that a major claim arises. Umbrella insurance can be purchased in increments of $1 million or more and can help alleviate some of the financial burden if something goes wrong during the course of your business operation.
If you’re looking for additional protection beyond what basic liability coverage provides, then umbrella insurance might be right for you!
Every entrepreneur needs at least these five types of business insurance.
This covers any damages and injuries caused by your work, whether they occur in the office or on site. If someone slips on your business’s stairs and breaks their ankle, general liability will pay for medical bills related to their injury.
- Professional liability insurance is another important type of coverage that every entrepreneur needs in order to protect themselves from lawsuits related to their professional services (and it also comes with some financial protection). If someone sues you for malpractice or negligence as an attorney or accountant, this type of insurance can help cover legal costs and settlements.* Commercial auto insurance provides both bodily injury protection if one of your vehicles injures another person or property damage protection if one of your vehicles damages another person or property.* Workers compensation covers medical expenses incurred by employees who get injured while performing job duties.* Umbrella/excess liability coverage protects against claims exceeding the limits set forth under commercial auto coverage–it gives businesses extra peace-of-mind knowing they’re protected against high-dollar lawsuits
Conclusion
In conclusion, every entrepreneur needs at least these five types of business insurance. It’s important to remember that your specific needs will vary depending on what type of business you own and how much risk it carries–but in general, the more coverage you have, the better off you’ll be if something goes wrong.
