It can take years and a considerable financial investment to open a business, yet it doesn’t take much for a business owner to be wiped out from losses that can occur while doing business. Every type of business has unique risk factors, so if a business owner wants to have protection from losses, then they will need to purchase business insurance. There are many different types of business coverage policies available, so it will depend on the nature of the business of the owner to determine which policy is right for them.
Business insurance is used to financially compensate a business owner for business-related losses they may experience. Some of the losses a business owner may experience include lawsuits, property damages, and employee injuries. An LLC only protects the business owner’s personal assets from business-related liabilities. For instance, if a business owner who has an LLC is sued, their home and other personal property are protected from the lawsuit. Only an insurance policy can protect a business owner from business-related liabilities.
There are several types of coverage, and every state has different requirements for the type of insurance a business owner must have. General liability insurance provides protection against a variety of claims resulting from lawsuits, property damage, medical expenses, claims of negligence, and more. Product liability insurance protects against financial loss due to defective products that cause bodily injury or death. Professional liability insurance such as errors and omissions insurance is typically carried by physicians, real estate agents, and accountants who may face lawsuits because of malpractice or negligence accusations. By law, employers are required to have workers’ compensation insurance, unemployment insurance, and in some states, disability insurance.
It’s important for a business owner to talk to an insurance agent or broker to find out which type of insurance is best for their business. The business owner should assess the type of coverage they need based on the risks of their business, then determine how much coverage they need to purchase. They should shop around for the best coverage at the best price, then make changes as needed for the coverage based on the changes in their business.