When do I need business insurance? That’s a question that many people who are considering opening up a business have. Whether you run a small operation out of your house, you own a small mom-and-pop establishment, or you operate a large organization, you need business insurance. It’s one of the most important things you can invest in – and in many cases, it’s required by law.
Below, we’ll shed more light on business insurance, including why it’s important, what options are available, what it covers, and where to buy business insurance.
When Is Business Insurance Important?
When do I need business insurance? The answer to this is simple: Always! Business insurance is important because it protects you, your employees, your clients, and anyone else who has dealing with your organization from potential risks. It helps to cover the cost of certain risks, preventing you and other individuals who are affected by your business from having to pay for those costs out of their own pocket.
For example, should someone slip and fall at your workplace, a commercial liability policy would cover the cost of any necessary medical care. As such, it protects you – the owner of the business – from having to pay for those fees out of your own pocket. It also protects the victim from having to cover the expenses themselves.
In other words, business insurance serves as invaluable protection for your business and all of those who are associated with it. When do I need business insurance? While you may never have to file a claim (hopefully), it’s better to have it and not need it than to not have coverage and end up needing it.
Types Of Business Insurance
There are several types of commercial insurance policies that are specifically designed for businesses. Many of these policies are required by law (check with your state to find out which type of insurance is considered compulsory), and even those that aren’t a legal requirement can still be a wise investment.
Some of the most common types of insurance policies business owners are either required to carry or that they would benefit from even if they aren’t a legal requirement include the following:
- Commercial General Liability Insurance. All businesses – from the smallest home-based organization to the largest international operation – need to carry a commercial general liability policy. This type of insurance will cover damage and defense fees if you, your staff, or the products or services that you offer cause any property damage or bodily injuries to a third party.
- Commercial Property Insurance. Whether you own or rent the building you conduct your business out of, you should invest in commercial property insurance. This type of policy will cover the cost of lost, damaged, or stolen inventory, tools, equipment, as well as the property itself, such as signs and landscaping.
- Commercial Auto Insurance. If you or your employees operate owned, leased, or rented vehicles for business purposes, you need to carry commercial auto insurance. In fact, it’s required in most states. This type of insurance covers the cost of property damages or bodily injuries that may arise in the event of an accident. It can also offer protection for uninsured motorists.
- Workers Compensation Insurance. Workers comp is compulsory in almost all US states. It covers the costs that are associated with any accidents or illnesses that employees sustain while they are on the job, including medical care and lost wages. It also pays out death benefits to survivors should an employee perish as a result of a work-related accident or illness. In states where it is not required, businesses are liable to cover such expenses.
There are several other types of insurance policies available for business owners. Speak to a reputable insurance broker to discuss the risks that are associated with your organization and to determine exactly which type of insurance you need – and how much coverage you require.
When To Get Business Insurance
When do I need business insurance? You should purchase business insurance before your establishment becomes fully operational and is opened to the public. A lot of business owners wonder, “Where to buy business insurance?” That depends on your specific needs. You can purchase it online or in-person from a reputable insurance broker. Where to get business insurance really depends on your specific needs.
Ethan’s Last Word
Just make sure that you consider your risks, receive several quotes, and weigh your options before you buy.