You’ve worked hard to build your company up to what it is today. Which is exactly why you should consider if you would recover from fire damage or a costly lawsuit without taking a serious financial hit.
Thankfully, there is a multitude of policy types to help ensure that you’re protected against risks like these and others. These policies cover everything from your equipment to the liability risk you face when clients visit your office. Here are a few types of business insurance that are best suited for small businesses.
Business Owner’s Policy (BOP)
Despite all the types of business insurance out there, the Business Owner’s Policy (BOP) continues to be the most widely recommended and used form. This policy combines business property and general liability coverage together in a single package. For most small businesses, this is the bare minimum coverage needed to protect against common risks.
Let’s break things down a bit further for your understanding. The property coverage portion is designed to protect items you own against theft, vandalism, fire, or other forms of property damage. This means if tools are stolen from a job site or a fire at your office destroys your furniture, you’ll likely be covered.
In contrast, the liability portion protects you from incidents where someone else is either injured or claims that their personal property was damaged by the actions of your company. For example, a customer slips on a wet floor at your retail store or one of your employees accidentally damages a window while trimming a tree at a customer’s home. These are both situations that could spur a potentially costly lawsuit if they aren’t handled appropriately. A BOP can protect you from these types of risks.
Professional Liability Insurance
Of course, there are still gaps that a BOP doesn’t cover. That’s when you need additional coverage to help fill in protections. The most common type of additional coverage is professional liability insurance.
Also referred to as Errors and Omissions insurance, this policy is common among business professionals such as lawyers, doctors, consultants, and accountants. Essentially, this policy helps protect you against lawsuits from situations where your company has made a mistake in connection with the professional service you offer.
Worker’s Compensation Insurance
For companies with employees, worker’s compensation insurance is vital, and in many states mandatory. This type of small business insurance covers medical bills if an employee is injured while on the job. This is an incredibly important coverage, especially if your company is in an industry with a higher risk of employee injuries, such as manufacturing or construction.
Commercial Auto Insurance
Another form of business insurance to consider is commercial auto insurance. If you or your employees use a vehicle during normal business operations, it is important to have an auto policy in place. Even if you aren’t big enough to have your own fleet, there’s still a need for a policy to help protect employees who drive their own personal vehicles while on the job. Policy details can get a little confusing and depend on your exact situation, so it is always best to speak with a licensed agent regarding coverage.
Owning a small business is both immensely challenging and wonderfully rewarding. Accidents can happen at any time, so it is always important to be prepared. Protect yourself by having adequate small business insurance coverage.