Businesses need commercial insurance because it helps cover the costs associated with property damage and liability claims. Without commercial insurance, business owners may have to pay out of pocket for costly damages and lawsuits against their company. Business income insurance helps cover the loss of income that results from property damage. It can be used for rent, utilities or payroll.
Insurance is very important because it serves as a safety net for companies in case things go wrong. It can also help make the business more stable. It's valuable to point out that it's important to have insurance for your company to protect you if you're sued. Jeff Kear, owner of event management software Planning Pod, said business owners who work from home should consider independent home-based commercial insurance.
With so many insurance providers and types of commercial insurance on the market, it's worth knowing your company's unique risks. No business owner has a crystal ball hidden in a closet that can predict what could happen in the future. I'm thinking of buying a restaurant in the near future, so I'll probably want to take out good business insurance for that. The policies your company may need include general liability, workers' compensation, commercial property and labor practice liability insurance.
For example, if you're starting an e-commerce business, protecting your data is vital to the overall well-being of your company. My brother wanted to start a shipping business and is trying to decide what kind of services he will need. Instead, Dokovna said, it's best to make strategic decisions about what insurance policies your company needs and which it doesn't. That said, certain companies might consider it a remote risk for someone to visit their property, let alone get injured, so you don't buy coverage.
Not taking out these types of insurance does not only expose small businesses to the risks they intend to cover, but also to government actions for breaking the law. There are many types of commercial insurance, so before looking for a plan, it's important to consider your specific needs. Small Business Trends is an award-winning online publication for small business owners, entrepreneurs and the people who interact with them. Also known as error and omission insurance, professional liability insurance helps cover the legal costs related to your company's error claims.
An insurance broker, rather than an agent who works for a specific provider, may be a good option for business owners who want to find coverage from different providers that fits all their needs, Kear said.