Running any business involves some risk. Thankfully, business insurance exists to help protect business owners against many different potential risks that may come with operating a business.
What is business insurance? Like car insurance, purchasing a business insurance policy protects you from potentially having to cover major loss out-of-pocket. Depending on the terms of your policy and what it covers, if a major loss were to occur pertaining to your business, you would only pay out-of-pocket up to the amount of your deductible, and the insurance would cover the rest of the cost.
There are several different types of business insurance coverage, including professional liability insurance, business property and theft insurance, income insurance, business auto insurance, worker’s compensation insurance, product liability insurance, and more.
Property insurance covers losses (beyond the deductible) caused by damage to business property. The terms of the policy will outline what types of damage and causes of damage are covered. Commercial auto insurance is car insurance for vehicles that are used in the regular course of business. Theft coverage adds insurance for losses resulting from stolen business property.
Professional liability insurance is meant to cover losses resulting from lawsuits against businesses that provide services (legal representation, health care, etc.). It’s unpleasant to consider making a mistake, but if a client or customer sues your business for something that was done wrong (like malpractice), your business could take a big financial hit if the suit is successful. Having professional liability coverage provides some peace of mind that most potential loss would be covered in the event that something went wrong and your business was sued for it.
Likewise, worker’s compensation insurance covers potential losses stemming from worker’s compensation claims by employees. In fact, according to the US Small Business Administration, all businesses with employees are required by law to have insurance for worker’s comp claims, along with unemployment and disability insurance.
These types of insurance (professional liability, commercial auto, malpractice, etc.) fit under the umbrella category of “commercial lines” insurance, which is meant to protect businesses in various fields and industries from liability that could bankrupt them. For companies that produce consumer goods, product liability insurance covers the cost of claims made by purchasers and users of their products due to product defects.
Income insurance protects against potential losses that may occur if your business had to pause operations or close for a period of time. There are also many types of industry-specific insurance policies available to suit your business needs.
Insurance is important for businesses both big and small. The US Small Business Administration recommends assessing your business’ risk and insurance needs each year, and shopping around for policies that provide the coverage your business needs yet are still affordable. Contact Boone Ritter Insurance to discuss insurance policy options for your business!