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Insurance is needed in virtually every part of daily life: there’s health insurance, car insurance, home insurance, etc., and if you’re a business owner, you’re going to need insurance for your business. The type of insurance your business needs depends on several things, such as the type of business you have and the size of your business, but there are some types of insurance that all businesses need.
Still, there are five types of insurance that all businesses operating in a physical location can benefit from.
Types Of Insurances
#1: General Liability Insurance (GLI)
GLI is a type of business insurance that all businesses need. This type of insurance will protect your business against financial loss from claims of bodily injury, medical expenses, personal injury (libel or slander), lawsuits and settlements, and damage to another person’s property.
General liability claims can come about during ordinary business operations, such as meeting with and representing clients, advertising your business, and working on another person’s property or at another location. States don’t require businesses to have GLI, but it’s in your best interest as a business owner to have it. GLI costs will differ depending on things like the condition of your business’s property and the location of the property, how many employees you have, and how many years of experience you have.
#2: Commercial Property Insurance
If your business operates within any type of commercial real estate property, then you’ll definitely want commercial property insurance. This type of insurance covers the cost of your owned or rented building if it gets damaged due to fire/smoke, some weather conditions, break-ins, and vandalism.
Unfortunately, commercial property insurance doesn’t cover damage from floods or earthquakes, so you’ll have to get a separate insurance policy for these conditions. Even if you don’t think that anything like this will happen to your business, it’s still worth it to ensure that your building, inventory, and other equipment will be covered in the event of a loss.
#3: Workers’ Compensation Insurance
If you’re just starting up your small business, you may not have employees yet. When you do start to hire help, make sure that you have workers’ compensation insurance. This type of insurance covers your employees financially if they get hurt or sick while working for you.
Workers’ compensation insurance covers your employees’ medical bills, ongoing care, wages loss due to missing work, and funeral costs if the work-related injury is fatal. Most states require businesses to have workers’ compensation insurance, so make sure you know if it’s required for your business to avoid fines and other penalties.
#4: Commercial Car Insurance
If you have a company car that you use for your business, then you’ll need commercial car insurance. This is different from your personal car insurance because it specifically covers property damage, bodily injury claims, and other accidents caused in a company-owned vehicle.
Commercial car insurance will also cover any rented vehicles used for business purposes and personal vehicles used for business. This means that if you drive your personal vehicle to work and for work, you’ll need a personal competitive car insurance policy as well as commercial auto insurance.
#5: Business Income Insurance
In the same way, your employees will need their income covered if they can’t work due to a work injury, your business will need income if you can’t operate due to commercial property damage. Business income insurance is also known as business interruption insurance, and all of your utility bills and employee wages will be covered until your business can operate again.
Keep in mind that this doesn’t pay for property damage (that’s commercial property insurance), just income lost while your business is closed for restoration.
Depending on your business needs, you may need more than this or less than this. There’s also commercial umbrella insurance, which extends coverage on your existing insurance policies.