When starting a new business, one of the first things on your mind is probably what you need to do in order to protect it. There are many different types of insurance policies out there that you might want or need for your company. Eight of them stand out as being absolutely essential. We will discuss these eight types of insurance and their coverage below. Please continue reading to learn more.
General Liability Insurance
This type of coverage is perhaps the first and most important type of insurance that you need for your new business. General Liability Insurance protects you from claims made by third parties as a result of bodily injury or damage to property. It also protects you from personal claims involving libel, slander, discrimination, and other such legal issues as they may arise. This type of coverage is essential for any business, no matter how small or big your business is.
Professional Liability Insurance
Errors and Omissions (E&O) Insurance, protects professionals such as doctors, lawyers, accountants, and other types of service providers who their clients may sue for negligence or mistakes that cause harm. This Professional Liability Insurance from an insurance company is normally required by the licensing boards that govern these professions, but even if it is not required, it may be a good idea to carry this coverage anyway.
Property Insurance protects your business assets if they are damaged or destroyed. It can cover damage to buildings, equipment, furnishings, inventory, and other necessary property for business operations. This type of insurance can be extremely important if you conduct business out of a building that you own (rented) or out of commercial space. It can also be a good thing to have if you conduct business out of your home.
Workers Compensation Insurance
Because the law requires employers to provide workers’ compensation coverage for their employees, this type of insurance is essential. It protects from claims being made against an employer due to bodily injury or disease suffered by employees while on the job. This type of coverage is mandatory in most states. It is something that you will need to have no matter what.
Product Liability Insurance
Product Liability Insurance, also known as Product Recall Insurance, protects your business if there is an issue with one of the products or services that you sell to others. This type of insurance may be necessary for any business that manufactures its own product line, whether physical or not. For example, software companies often find themselves needing this type of insurance, as do businesses that sell or distribute dangerous products.
Employment Practices Liability Insurance
Also known as EPLI or “E-cubed,”, Employment Practices Liability Insurance protects your business from claims made by employees (or ex-employees) as a result of tortious conduct during their employment. This type of insurance is important because many such claims can significantly strain company assets. It is something that you probably want to consider even if your business is small and only has a few employees.
Liability insurance which is also known as Umbrella Insurance, provides over and above the limits of your underlying policies. It is intended to protect you if a claim should exceed the limits of another type of insurance that you may have, such as general liability or auto insurance. Umbrella Insurance can protect against many different types of claims, but every business does not always need it. You should consider whether or not you need this coverage and, if so, how much insurance you should purchase. Also, be sure to shop around for the best rates, as premiums for umbrella insurance can vary significantly from one carrier to the next.
Directors and Officers Liability Insurance
Also known as D&O Insurance, this type of coverage protects company directors and officers if they are sued for violating their legal obligations as directors or officers. This type of insurance may be necessary if you hold a position within your business that makes you responsible for managing the company’s operations or dealing with contracts, employment issues, etc. Also, if your company is a public company, this type of insurance is required by law.
When it comes to protecting your business, insurance is a precious tool. It can protect your company when bad things happen, help you plan for the future, and have a significant impact on your success or failure as an entrepreneur. Even if you are just starting out with a single product or service in one location, there are ways to make sure that your business is covered. So, don’t wait to talk to a Cincinnati insurance company agent today about what type of coverage is best for you.