Each year, over 600,000 businesses open in the United States. Owners of these businesses dream of growing them into successful entities.
The reality, however, is that only a handful of these ventures ultimately succeed. In fact, 90 percent of startups fail. But this statistic isn’t meant to discourage you.
The truth is you can significantly boost the chances of the success of your business. One way to do so is by protecting your venture through liability insurance.
After you’ve invested all the time, money, and energy into building your business, the last thing you want is for natural disasters, theft, accidental injuries, or some other misfortune to put it all in danger. Business insurance helps protect you from all this.
Visit this site for a more accurate estimate of how much coverage you may need.
What Insurance Do Business Owners Need?
There are many different types of business insurance available today. To determine the ideal type of insurance, consider the nature of your enterprise, the potential risks you face, your specific needs, what coverages your state requires, and so on.
Here are the main insurance types businesses require:
General Liability Insurance
General liability insurance protects your business against claims such as false advertising or slip and fall accidents. If your business has a physical location, you need this coverage type.
Workers’ Compensation Insurance
This type of commercial insurance covers the cost of medical care and lost wages if a worker is injured on the job. Workers comp insurance doesn’t require establishing fault. Almost all states require businesses to carry this type of insurance.
Unemployment Insurance
Unemployment insurance covers a percentage of lost wages for workers who lose employment due to such circumstances as being laid off. Every employer who pays over $1500 in wages per quarter is required by federal law to have this policy. The same applies to an employer with at least one employee for 20 or more weeks per year.
Disability Insurance
This policy is meant to cover a percentage of lost wages for employees who are unable to work for a given period of time. While the policy isn’t a requirement by law, it can be highly beneficial for small business owners who take care of many of their business’s daily operations.
Professional Liability Insurance
If your business primarily offers advice or services to clients, then professional liability insurance can be beneficial. The policy is popular with consultants, marketers, health professionals, lawyers, tax preparers, wedding planners, and home services.
Clients can bring claims alleging errors, negligence, or omission.
Property, Homeowners’ and Renters’ Insurance
For businesses with a physical location, these policies help cover the physical structure and the items inside should damage occur. This damage may be caused by fire, vandalism, natural disasters, or theft.
While the law does not require you to have these policies, they may prove highly beneficial in helping you restore your inventory, POS systems, and other essential items you need to run your business.
Directors and Officers Insurance
This liability insurance protects personal assets belonging to the directors or officers of your company in case they’re sued for the way they managed or advised the company. Claims may be made by employees, investors, vendors, clients, or other parties.
Product Liability Insurance
This policy is designed for businesses that make goods. It protects you from claims that involve bodily or property damage caused by your products. An example is where a battery your company made explodes and causes a fire that damages property or injures people.
How Much Does Liability Insurance Cost?
The cost of liability insurance generally depends on the perceived risk levels of your business. If you deal with dangerous equipment and heavy machinery, for instance, you’ll need more coverage than a consultant who spends most of their day sitting safely in their office.
How Can You Save on Liability Insurance?
While you should never try to cut corners when it comes to business insurance, it doesn’t mean that you can’t save money on your policy. Here are a few smart ways to do so.
Shop Around: Don’t go for the first offer you find. Different insurance providers charge different prices for the same policy. Call at least three reputable providers and choose one that offers a competitive rate.
Consider a Higher Deductible: A deductible is the amount of money you pay out of pocket before your policy kicks in. When you choose a higher deductible, you pay less premium.
Purchase a Package Policy: Buying a package policy like a Businessowners Policy (BOP) is often cheaper than opting for individual policies. Package policies typically provide a standard coverage and limit of liability that perfectly suits small businesses.
Listen to Your Insurance Agent: An insurance expert can offer valuable insights on how to keep your insurance premiums low. They can give you ideas on how to protect your company from risks. They can also alert you of any new offers and discounts you can take advantage of.
Work closely with your insurance agent, always keeping them aware of any significant changes you’re planning in your business that may affect your policy.
Protect Your Business With Liability Insurance
You’ve worked hard to establish your business, and it’s only natural you would want to keep it safe. The best way to do so is by having enough liability insurance. In case the unexpected happens, you can always be sure to bounce back.