For many business owners, the topic of business insurance is a challenging one to wrap their business risks around. It can be difficult to know which types of insurance to purchase and what each one covers. Having an understanding of the most common types of business insurance necessary for your business can go a long way toward clarifying what you may need and what you can leave out. So what are the most common types and when should you purchase them?
Business insurance is complex, but it doesn't have to be complicated.
The easiest place to start is with the types of mandatory insurance you should have. These are policies that many businesses are mandated to have in place. They include:
- Workers’ Compensation, which covers you if an employee is injured on the job
- Public Liability Insurance, which covers you in the event that someone is injured or killed on your premises
- Third Party Personal Injury Insurance, which is required if your business operates a motor vehicle
Other Types of Liability Insurance
The following types of insurance are not mandatory but should be considered depending on the nature of your business.
- Product Liability —covers you for damage caused by a failure or defect in one of your products. If your business offers physical goods for sale, you may want this type of policy.
- Professional Indemnity —if your business offers professional advice to clients, this insurance can protect you from lawsuits arising from such advice.
- Management Liability Insurance—this insurance covers your personal assets when a manager or officer of your company engages in illegal practices on behalf of your business.
Many businesses, especially those with brick-and-mortar facilities, maintain valuable property, product inventory, and other assets that would be very costly to replace in the event of an accident. While there are many different types of policies that fall under this category, some of the most common include:
- Building and Contents— recommended for any business with a physical presence, this covers your building and contents against catastrophic events such as fire, earthquakes, floods, and more.
- Burglary— exactly what it sounds like, this insurance covers you against theft and is important for businesses where the premises isn’t always attended or monitored.
- Goods in Transit— this policy covers any damage to goods you buy and sell while they’re in transit.
Other Types of Insurance
There are many other types of insurance coverage available. Use our coverage estimator to determine which types of insurance you need. Also, consider that each insurance carrier offers slightly different coverage based on the types of risks they insure. Working with an insurance broker who understands your business and its operations will allow you to conduct a proper analysis and comparison of policies.
There is no one-size-fits-all approach when it comes to insuring your business. The important thing is to take a pragmatic approach to evaluating where your potential risks are, and ensuring that you have adequate coverage to protect you in those areas. Business insurance is complex, but it doesn't have to be complicated. If you’re unsure of which policies you should be including for your business, consult with us as your professional insurance broker. We will work with you to help define your needs and select the right policies to meet them. At Pacific Reliance Insurance™, we can help you find the right coverage at the best value for your business.
Contact us today!