Entrepreneurs are natural risk takers, just the act of setting up a start up business is risky. What most won’t do however is run a business without insurance and that’s smart, reducing risk and minimising liability and thus costs for incidents out of your control just makes sense. Accidents happen and natural disasters can leave a big footprint of devastation that may include your building, staff, products and clients.
According to SBA a business having insurance is the law so what are the different types of insurance a business can opt for? Let’s have a look at four insurances recommended all businesses:
1. Professional liability insurance
This insurance also has another name it’s often called ‘errors and omissions’ (O&E) insurance. With this type of insurance, you’re covered against claims that are filed by others due to negligence on your part. Even if it was an accident, for example disgruntled clients will sue when advice given by say a financial advisor ends up in an investment going bad, particularly if it results in losses.
This type of insurance is needed by all businesses and it’s recommended that each firm gets a policy based on the nature of the service or products it offers, so the policy is customised for the business.
2. Property insurance
All businesses need property insurance to safeguard against potential risks, like a fire, theft. This is insurance is not for the building but its contents i.e. your business inventory, signage, furniture and equipment.
However, major natural disasters such as earthquakes and floods may not be covered in this type of insurance, so it pays to shop around as there are insurance companies now providing protection against some natural disasters. Be sure to speak to your insurance advisor or broker about what is in the cover before signing on the dotted line.
3. Workers’ compensation insurance
If you do not want disgruntled employees or ex-employees going to a personal injury lawyer to get compensation for one reason or another, then you must get this type of insurance. It is also mandatory in some cases as it provides protection not just to employers and business owners but also to employees as well.
This type of insurance covers disability payments, medical treatment, and lump sum payments in case an employee gets injured at work or dies due to an injury sustained. Moreover, employees also get paid if they sustain a temporary or permanent disability due to the result of an incident caused at work.
This insurance is important even if your employees work in a risk free environment as certain injuries cannot be prevented – as we’ve aforementioned accidents do happen!
4. Vehicle insurance
If your business involves the use of vehicles then they should be fully insured to protect against damages in case of an accident. While many businesses get insurance against third party injuries, comprehensive insurance is also a good idea as it covers the vehicle as well. You do not, however, have to worry about the drivers as their personal insurance or worker’s compensation can cover them. Nonetheless, the scenario differs in case of delivery personnel.
So while Entrepreneurs have a good appetite for risk, insurance is not one of them.