13 Insurance Policies Every Small Business Owner Should Consider Having

“My home owners policy covers my business since I work from home.” Are you 100% sure that is the case? With businesses taking on a variety of forms and workspaces it has become more important to know what insurance is necessary to protect you and your families assets. Many local governments require certain policies be in place to legally conduct business.

While reading the list of coverages below take into consideration your business structure and what services and products you offer. You may find some areas where a little monthly expense in coverage would provide invaluable piece of mind.

1. General Liability Insurance: It is paramount for all businesses, including home-based businesses to have liability insurance. This policy provides either you, your staffs, or products or services with defenses and damages against Third parties from bodily injury or property damage caused or alleged to have been caused by your business.
2. Property Insurance: If your business asset includes building or business personal property including, computers, office equipment, inventory or tools, then you might want to get a policy that would protect against fire outbreak, theft, smoke damage, vandalism etc. You should also consider business interruption or loss of earnings insurance as part of the policy to protect your earnings if the business is unable to operate.
3. Business Owner’s policy (BOP): A business owner policy covers all packages a business owner would need. Most times BOPs include crime insurance, vehicle coverage, liability insurance, property insurance, and interruption insurance. Depending on your company’s needs the content of a BOP can be modified. It would cost a business owner less if he chooses to opt for a BOP because the bundle of services often costs less than the total cost of all the individual policies.
4. Commercial Auto Insurance: Commercial auto insurance protects your company’s vehicles. You can insure vehicles that convey employees, products or equipment. With commercial auto insurance you can protect your official cars, trucks, vans, SUVs against damage and collisions. If you do not own company vehicles, but your employees use their vehicles on company business, then you should go for non-owned auto liability to protect the company if your employee doesn’t have auto insurance or an inadequate coverage. Often times the non-owned can be included in the BOP policy.
5. Worker’s Compensation: This form of compensation offers a form of protection to employees who got injured on the job. This insurance covers wage replacement and medical benefits of employees who got injured while working. To get these benefits, an employee gives up his or her right to take legal action on his or her employer over an incident. It is very essential for a business owner to have worker’s compensation insurance as it act as a form of indemnity. Different states have different laws, but it is mandatory in all states to have worker’s compensation if you have W2 employees. Consequences for non-compliance can be very stiff.
6. Professional Liability Insurance: Commonly referred to as Errors and Omissions Insurance. This form of insurance provides protection against damages for failure to or inadequately rendering professional services. The general liability policy does not cover this, so it is very important to know the difference. Professional liability insurance is important for any professional firm, including lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair salons and technology providers to mention a few.
7. Directors and Officers Insurance: This is to protect directors and officers in a company against their actions which may have a direct effect on the company’s earnings or operations. Should a director or officer in your company, as a direct result of their actions on the job, finds his or herself in a legal situation, the director and officers insurance policy would cover the cost of damages and loss as a result of a lawsuit.
8. Data Breach: data breach policy protects a company from any lawsuit pertaining to loss of sensitive or non-public information about employees or clients which are stored either on the company’s computer, servers or in paper files. Companies are solely responsible for protecting any personal information or data and should any form of data breach occur can be protected by the Data Breach policy.
9. Homeowner’s Insurance: It is very important for every homeowner to get a homeowner’s insurance. This insurance protects you against damage to the home and against damage to items inside the home. Furthermore, this type of insurance may protect you from mishaps that happen at home or may have happened due to your actions.
10. Renter’s Insurance: Renter’s insurance is a sub-set of homeowner’s insurance; it applies only to those who let out their homes. It protects against damages done to the content of the property, and personal injury within the home.
11. Life Insurance: Life insurance protects an individual against death. Having a life insurance means the insurer would pay a certain amount of money. You pay a premium in exchange for the compensation the beneficiary would receive upon your demise. Having a life insurances guaranty financial security for your family upon your death. It gives peace of mind, knowing in your absence your loved ones would be well taken care of.
12. Personal Automobile Insurance: Auto insurance is an another essential type of insurance. Auto insurance protects all road vehicles (cars, motorcycles, trucks, etc.). Auto insurance performs two functions, protection against both physical and bodily injury resulting from a crash, as well as any form of liability that might have occurred from the collision.
13. Personal Umbrella Insurance: Should you need additional coverage on top of your existing insurance policies. This the point where personal umbrella insurance comes in. It is a form insurance that acts as an extension to an already existing insurance policy and covers beyond the regular policy. This insurance covers different kinds of claims, including homeowner’s or auto insurance. Generally, it goes for an increments of $1 million and is used only when liability on other policies has been exhausted.