3 Types of Insurance Your Business Needs
As a business owner, it’s important to be positive and optimistic for the most part. However, if you plan on being in business in the long run, it’s pretty unrealistic to think that nothing bad is ever going to happen.
Insurance is a great tool that can be used to protect you against the unexpected and limit the effect of any major damages that may take place.
If your business is your bread and butter, you may want to obtain the proper insurance needed to protect that asset. Here are 3 types of insurance your business may need now or in the near future.
1. Professional Liability Insurance
Professional liability insurance is also known as errors and omissions (E&O) insurance. This insurance protects businesses and their employees against claims made by clients for inadequate work or negligent actions. Professional liability insurance often covers court costs and any settlements up to a specific amount as detailed in the insurance agreement.
Generally, this is a standard type of insurance to get regardless of what industry you work in. If you’re running a service-based business or even shipping products, there’s a possibility that an upset customer or client may want to file a lawsuit if things don’t go as planned or if they miss a shipment for example.
It’s important to clearly explain how your business works in terms of the process and results in your disclaimer statements, but it doesn’t hurt to have E&O insurance as well to protect your business in the event of a lawsuit.
2. Property Insurance
If you are renting out space or own a facility that you’re running your business out of, you may want to consider getting property insurance. This type of insurance can cover equipment, supplies, furniture, etc. in the event that your place of business suffers loss from a fire, storm, or theft incident.
Think about how valuable the equipment is that you need to run your business and how much it would cost if you had to replace everything. If the total costs would be overwhelming or if you’re financing equipment, you’ll definitely want to consider some property insurance.
If you run your business out of your home, you may not qualify for property insurance but you can still increase your homeowner’s insurance coverage or look into a home-based business insurance policy to protect the valuable items in your home office that would need to be replaced if they ever got damaged or stolen.
3. Data Breach
Are you storing personal information on clients or customers in secure databases for your business? This can be names, mailing addresses, or even driver’s license or credit card numbers if you’re accepting payments, shipping items, or simply managing a team of employees and need their personal information for payroll.
Losing this data due to a data breach could result in a lawsuit. This is why data breach insurance is a must if you want to protect your business from any loss. This insurance protects against damages or costs incurred in the event of a data breach.
While we all want to run our business with integrity and close attention to detail, no one if perfect 100% of the time and mistakes, accidents, and unfortunate events do happen from time to time. It’s important to run your business wisely and protect it. Insurance can provide peace of mind and help your business stick around longer during times of adversity.
Start assessing the risk associated with running your business and see if there’s a specific type of insurance to help you combat that risk. Then, don’t hesitate when it comes to obtaining the correct policy and coverage level.