Understanding Business Insurance and Why Your Company Needs it
23 Mar, 2015 |
One of the most important financial decisions that any business owner will make is deciding on an insurance policy to protect their company and their employees. Before opening your doors to the public, here is an overview of commercial insurance policies and exactly what form of coverage you may need.
What Coverage Am I Required to Have?
One of the most important questions that business owners will need to ask themselves is what type of coverage they are legally required to have due to state and federal laws. This is generally determined by the size and type of company that you have created as well as where you are located. At the very minimum, a company will need workers’ compensation insurance once employees are hired and commercial auto insurance if vehicles are used for any business purposes.
Liability Insurance Coverage
Liability insurance may not be required by law in some instances, but almost every company will need to have one of these policies in place. According to Meyer’s Insurance Ltd., liability insurance is the first line of defense against all of the most common issues that a business owner will experience. This may include customers injuring themselves on your property or even a minor legal issue that will be handled in a civil trial or out-of-court mediation. Liability insurance is generally considered to be the “core” coverage that a business owner will have for their company.
Special Insurance Needs
From there, it is time for business owners to begin considering what form of special coverage they will need in the coming months and years. As stated previously, commercial auto policies must be in place if any company vehicles are purchased or if private vehicles are used for any business purposes. Business owners may also want to consider expanding their coverage to their property in the event of theft, vandalism, or natural disasters. Liability coverage can also be upgraded to include professional liability and product liability insurance if your products or services lead to legal issues.
Business Owners Policy
Also referred to as a BOP, a business owner’s policy is designed to bundle all of the coverage that a business owner will need into a single policy. The reason for this is to simplify the process of paying insurance as well as lower the overall costs. Owners will often create the basic policy around liability insurance, workers’ compensation, and property insurance and then add on riders such as commercial auto coverage or umbrella insurance for larger expenses.
Finding the perfect insurance policy may seem like just one more project for a business owner, but this coverage could mean the difference between success and failure if any serious mishaps, injuries, or accidents occur.