A Guide to Help You Find the Best Business Insurance Policy

When you’re opening a business, you spend a lot of time making plans for how to manage problems when they arise. You make plans for when an employee has to call in sick, a piece of your manufacturing line breaks down, or an unhappy customer calls you. But what do you do when the unexpected strikes? A business insurance policy can help protect you from the scenarios you can’t foresee during your business planning.

From employee injuries and libel lawsuits to an office fire or theft, a business insurance policy can keep you running smoothly through any disaster. Read on to learn more about business insurance policies and which ones you might need.

What is a Business Insurance Policy?

A business insurance policy is designed to protect you from the risk that comes with normal operation of a business. One of your employees may get injured on the job, a product may break or fail in unexpected ways, or one of your delivery drivers may get in a crash. In any of these cases or a dozen others, your company needs to have insurance backing you up.

There are a number of different types of business insurance policies designed to protect you in different scenarios. Which policies you get will depend a lot on your industry and your business’s particular operating conditions. In some cases, you may be required by law to keep certain business insurance policies.

How it Works

In many ways, a business insurance policy operates the same way as your personal insurance policies do. Your business will have a deductible it will have to pay before your insurance coverage kicks in. But once you’ve paid that relatively small amount, your business will be protected from further losses, at least up to the limit set on your policy.

There are several ways you can get the specific business insurance policies you need. If you feel comfortable navigating the insurance system yourself, you can buy policies directly from an insurance company. If you’d like a little more guidance, an insurance broker can help you find the policy that will work best for your company.

Why You Should Have a Business Insurance Policy

About half of small businesses will fail within their first five years. If you want to be one of the ones that beats the odds, you need to set yourself up on as firm a financial footing as you can. One car crash, workplace accident, office fire, or global pandemic could shut down your business for good.

Business insurance policies are designed to give your business the best chance at survival in the event of an accident or disaster. It can help you limit your losses and keep your business in the black. It may also help you attract customers, as some types of business insurance policies help to protect your customers as well as your company.

Professional Liability Insurance

One of the most common types of a business insurance policy is professional liability insurance. In essence, these policies protect you from lawsuits over any mistakes or failures to perform up to standards. If a customer slips and falls in your store, these policies will shield you from having to pay the medical fees for their broken arm.

Liability insurance is not a one-size-fits-all deal. There are different policy styles within this category, and each of them covers different things. When you’re shopping for this policy type, be sure to consider your specific business needs and read the policies carefully to make sure they cover your needs

Property Insurance

Just as with your home insurance, business property insurance is designed to protect the physical components of your business. The building you operate out of, signage, furniture, and inventory can all fall under these policies. The type of business insurance policy you need to get will depend on whether you rent or own your building. It will also depend on whether or not you’ll be keeping your inventory on-site.

The only catch with business property insurance is that it generally doesn’t cover mass destruction events. It will cover you from fire damage, theft, and storm damage, but not from things like earthquakes, hurricanes, or flooding. If your area is at risk of these disasters, you may want to look into getting an additional policy.

Product Liability Insurance

No matter how carefully you design and review your products, from time to time, a dud is going to slip through. A customer may also accidentally injure themselves while using your product. In these cases, your business will be vulnerable to lawsuits that can cost you thousands.

Product liability insurance protects you from these lawsuits. This is different than professional liability insurance in that it covers only your products, not your actual business itself. If your business offers any sort of product for sale, you’ll want to have one of these business insurance policies.

Professional Indemnity Insurance

Professional indemnity insurance is the equivalent of product liability insurance for businesses that offer services rather than products. Even if you don’t offer a physical product, your customers could still hold you liable for service failures. You could find yourself facing a lawsuit for negligence, giving poor advice, libel, slander, malicious falsehood, and unintentional breach of confidence.

A professional indemnity policy will protect you from these lawsuits. It may also help you attract customers, since it gives them a measure of assurance that you’ll provide the best possible level of service. Make sure you research which business insurance policy will cover situations that apply to your particular business model.

Vehicle Insurance

Vehicle insurance for businesses serves much the same purpose as personal vehicle insurance does. Whether you run a delivery service or provide company cars for your employees to use, you’re at risk of a car accident. You would have to pay for repairs to your vehicle and any medical expenses of your employee. You might also have to cover the other driver’s expenses depending on whose fault the accident was.

When you’re buying business vehicle insurance, you should get comprehensive insurance. Basic insurance is fine for teenagers driving second-hand cars that will break down in two years. But comprehensive insurance will give your business the protection it needs in case of an accident.

Business Interruption Insurance

You can have the finest business plan in the world, but it won’t do you much good if something like, say, a global pandemic hit. Many business owners have found themselves stuck in a holding pattern the last few months. Unable to keep their businesses open due to COVID-related restrictions, but still having to cover employee salaries and pay rent. This has already caused a lot of small businesses to close their doors, and we’re likely to see more losses in the coming months.

Business interruption insurance is there to protect you from the unexpected. There can be a number of reasons you might suddenly have to shut your business down for a while. This type of a business insurance policy can help you cover your costs while you’re closed so that when the time comes to reopen, you can do so on as strong a financial footing as you left on.

Business Insurance Policy for Home Businesses

If you run a business out of your home, you may find yourself in a unique insurance situation. You have personal home insurance, and you may have professional indemnity liability. But there are some business situations that may not fall under the umbrella of your personal home insurance.

A home office policy can help you cover any gaps in your homeowner’s and business insurance. It may cover general business liability, lost income, and expenses like payroll if your home is damaged in such a way that you can’t run your business. It can also protect your business from fire, theft, and other such damage.

Learn More About a Business Insurance Policy

Running a business can be a risky proposition, and you need to make sure you have protection in case of a disaster. The right business insurance policy can help you get the coverage you need. This will keep your business operating even through a catastrophe. Take a look at your business practices and decide which business insurance policies will serve you best.

If you’d like help getting a business insurance policy set up, check out the rest of our site at Your FundingTree. We provide top-notch business insurance solutions and specialty insurance coverage. Check out our business insurance options and start running your business confident that you’re protected from any disaster.