The federal government requires that all companies with employees have workers' compensation, unemployment and disability insurance. Some states also require additional insurance. The laws that require insurance vary by state, so visit your state's website to learn about your company's requirements. All small businesses need general liability insurance.
This liability policy provides protection against common customer or customer incidents, including bodily injury, property damage, and personal injury. An accident involving a customer can result in huge legal fees and medical expenses, making it an important policy for any business. For example, small businesses with valuable properties should consider commercial property insurance, which covers their physical assets against loss or damage caused by acts of vandalism, natural disasters, and other similar events. If you're a small business owner in a low-risk industry, you may be able to reduce premium costs by combining this policy with general liability insurance in a business owners (BOP) policy.
Learn more about general liability insurance. To get business insurance, contact an insurance agent who specializes in insuring small businesses. Often, you'll save money by taking out a business owner's policy that combines several types of business insurance into a single policy. The BOP combines coverage for all major property and liability insurance risks, as well as many additional coverages in a single policy package suitable for most small businesses.
The term “BOP” specifically refers to the language of insurance policies developed (and revised as necessary) by ISO experts. ISO provides examples of insurance policy language, research and a variety of other products to insurance companies. Property insurance compensates a business if the property used in the business is lost or damaged as a result of several types of common hazards, such as fire or theft. Property insurance covers not only a building or structure, but also what insurers refer to as personal property, that is, office furniture, inventory, raw materials, machinery, computers and other items vital to a company's operations.
Depending on the type of policy, property insurance may include coverage for equipment breakdowns, debris removal after a fire or other destructive event, some types of water damage and other losses. Customers can claim that the company caused damage to them as a result, for example, of a defective product, an error in a service, or disregard for someone else's property. Or a complainant may allege that the company created a hazardous environment. Liability insurance pays for damages for which the company is found responsible, up to the limits of the policy, as well as attorneys' fees and other legal defense expenses.
It also pays the medical bills of anyone injured by the company or at the company's facilities. Some companies include services such as giving advice, making recommendations, designing things, providing physical care or representing the needs of others, which can lead to customers, clients or patients suing them on the grounds that the company's failure to do a job properly has harmed them. Errors and omissions or professional liability insurance cover these situations. The policy will pay any judgment for which the insured is legally responsible, up to the policy limit.
It also provides legal defense costs, even when there has been no crime. Labor practice liability insurance covers (up to the limits of the policy) damages for which the employer is legally responsible, such as the violation of the employee's civil rights or other legal rights. In addition to paying a sentence for which the insured person is responsible, it also provides for the costs of legal defense, which can be substantial even when no crime has been committed. Liability insurance for directors and officers protects directors and officers of corporations or non-profit organizations if there is a lawsuit that states that they managed the company or organization without due regard to the rights of others.
It also provides for the costs of legal defense, even when there has been no crime. As the name suggests, a general liability policy provides coverage that exceeds a company's other liability coverage. It is designed to protect against unusually high losses. It provides protection when the limits of one of the underlying policies have been exhausted.
For a typical company, the general policy would provide protection beyond general liability and auto liability policies. If a company has employment practices, liability insurance, director and officer liability, or other types of liability insurance, the umbrella could also provide protection beyond the limits of the policy. Because similar professional services share the same risks, it's useful to explore business insurance coverage recommendations by industry. Disability insurance is similar to workers' compensation in that it temporarily covers an employee's lost salary if they are unable to work due to a disability.
Key person insurance, also known as key man's insurance or key woman's insurance, helps replace the loss of income due to the death of a key executive at your company. When a worker dies as a result of injuries sustained while working, insurance provides compensation to the employee's family. This type of insurance protects you if an employee files a lawsuit against you for unjustified disciplinary measures or dismissal, sexual harassment, discrimination, negligent evaluation, breach of the employment contract, mismanagement of employee benefits, or emotional abuse. Commercial supplemental insurance (similar to personal supplemental insurance, but with higher policy limits) covers the cost of additional liability that exceeds the limits of an underlying policy, such as general liability insurance or commercial auto insurance.
Property insurance coverage ranges from basic to comprehensive (and price scales reflect this), although small and medium-sized businesses with physical assets often need some form of this coverage. If you answered “yes” to any of these questions, business insurance will help you minimize your risks. Having life insurance can give you peace of mind that your death will not place a financial burden on your family or business partners. When buying insurance for small businesses and comparing policies, keep in mind that your rates will depend on the specific characteristics of your business.
This type of insurance is also essential for professional service providers, such as consultants and financial advisors. If you have a commercial or commercial property based on your home, check the commercial coverage of your home insurance. Product liability insurance provides more protection and security than a standard product warranty or warranty. .