What Kind Of Business Insurance Do You Really Need?

Are you as smart about your insurance as you are about the rest of your business?

For example, if you’re a freelancer working from home, just having homeowners insurance will not cover the accident your client has when they fall down your stairway after an appointment. And what about life insurance? Do you have it, or enough?

Here are the major types of insurance that you should consider.

General Liability Insurance: Every business needs liability insurance in case you, your products or services, or an employee, causes or allegedly cause bodily or property damage to any party. Costs vary depending on the specific risks of the business. A sole proprietor might pay a couple hundred a year for where a landscaping business could pay a couple thousand, the difference in cost showcasing the difference in risk.

Worker’s Compensation: This is a legal requirement if you have employees. If an employee is injured on the job, they are covered by worker’s compensation insurance, which provides wage replacement and medical benefits.

Life Insurance: Why did you start a business? One reason is likely because you want to ensure the financial stability of your family. Well, that’s exactly the purpose of life insurance.

Property Insurance: If you own your building or have personal business property, property insurance can protect you if you experience theft, fire, weather damage, etc.

Commercial Auto Insurance: Commercial auto insurance protects company vehicles. Also, if employees drive their own cars on company business, a “non-owned auto liability” policy protects your business if your employee does not have insurance or has inadequate coverage.

Professional Liability Insurance: Otherwise known as Errors and Omissions Insurance, this policy is applicable for service oriented businesses such as lawyers, hair salons, accountants, etc. It protects your business if you are sued for negligence, even if you haven’t made a mistake.

Directors and Officers (D&O) Insurance: If a director or officer from your business finds themselves in a legal situation as a result of actions from the job, D&O insurance can cover costs or damages lost as a result of a lawsuit.

Data Breach: If your business stores sensitive/private information about employees or clients on computers, servers, or paper files, you are responsible for protecting that information. In this era whenever Target can get hacked, having such a policy is wise.

Once you know your options, then question then is what to get, and how: Start by asking other business owners who they work with. Insurance broker represent many different policies and companies, agents are exclusive to their company. It is smart to get a few different quotes rom various agents and brokers and compare rates and policies. And then it is simply a matter of making some smart choices.

Steve Strauss – Senior small business columnist at USA TODAY and author of 15 books, including The Small Business Bible, Steve is your host at TheSelfEmployed.com.

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