Businesses use insurance as a tool to help minimize risks and reduce their liability in the event of an adverse incident. That could be an accident, a faulty product or a legal claim. Not all companies need the same types of coverage, however. The right policies for your business will depend on its location, the number of employees and the nature of your work. Choosing the right policy takes time and at least a basic knowledge of liabilities and available coverage options.
Most businesses are required to carry some form of liability coverage. However, since there are several types of coverage options, you will want to ensure that you have the right ones. Professional, product and general liability are some of the most common ones you will come across. In some cases, companies may choose to self insure or join a captive insurance group to better manage premiums and mitigate risks.
Worker’s comp coverage serves to protect you and employees in the event of an accident or injury in the workplace. In general, it covers medical and legal costs associated with a covered accident and replaces lost wages for affected workers. Requirements vary between states, but most mandate that companies maintain worker’s comp coverage for eligible employees.
Companies can accumulate property of a substantial value over time. In addition to land and buildings, business property includes equipment, vehicles and supplies needed to run. Commercial property insurance will help pay if any of a business’s physical assets are damaged due to instances of theft, vandalism, broken pipes or fires.
You should work with a financial advisor and insurance agent to determine the correct types and levels of coverage for your business. In general, you will want to secure a minimum of liability, property, and worker’s compensation coverages.