Who Needs Business Insurance?
Monday, August 12, 2013
If you own a business, you may be wondering if you might need business insurance. In fact, all business owners should have business insurance, and can be considered the same as home insurance and car insurance, you never know when you might need it, and not having it can put you and your business at risk.
Who is legally required to have insurance?
- If you are the owner of a business that employs people, you are legally required to have workers' compensation insurance. If one of your employees is injured in a work-related accident, it covers some of their medical costs and loss of income. In the place of death, the insurance will compensate the family for the loss of income that they suffer.
What other types of insurance should business’ consider?
- Property insurance protects businesses from fire, theft, vandalism or other damage that destroys buildings, merchandise, vehicles, and so on. Each business should consider getting property insurance, as this is where more information is stored.
- Health insurance is a good way to recruit good employees and retain them. There are many group health insurance plans to cover your employees' health expenses.
- Ideally all business owners should consider Business interruption insurance. If you run a small business that is damaged by fire or vandalism, and it takes months to get your operations back on track, this type of insurance compensates you for the losses in productivity during the interim period. This is important even for very small businesses that employ only one of two key people because injuries or illnesses to key people can cause a complete halt in productivity.
- Business owners can be financially ruined without liability insurance. If your business is sued by someone else, liability insurance pays the business' legal fees and the compensation the business is ordered to pay the other party. If your business is a single-owner business or a partnership, law suits will be against you as a person, and will accordingly be permitted to claim your personal assets as compensation. It is thus extremely important in such cases.
There are several types of liability insurance.
- Product insurance covers damage to others from the use of your products. If you do not manufacture products, you may not need this type of insurance.
- Professional liability insurance covers the business if someone is harmed by the professional service that the business provides. Lawyers and real estate agents, for example, require this in case they provide advice that is inaccurate or incomplete.
- General liability insurance covers a business if the operations injures someone or for example, if a customer falls on your property. If your property is never visited by your customers or if you do not have extensive operations that can injure others, you may not need it.