Starting a business is a big undertaking. One of your primary tasks should be to get business insurance. But, sometimes, that might seem like it’s easier said than done. What types of commercial insurance policies do you need? Let’s take a closer look at 15 of the most important types of coverage that you’ll likely need in your operation.
Your Essential Coverage Options
All small businesses are unique. However, they can all benefit from numerous essential types of insurance coverage. Each one works in its own way to protect the business in case problems arise.
1. Property & Contents Insurance
This coverage helps you pay for damage or losses to the physical assets you own that are essential to the business. Coverage might apply to your buildings and signage, along with contents within the business, including furnishings, inventory and stock.
2. Commercial General Liability (CGL) Insurance
CGL coverage can pay a third party, like a customer, if you make mistakes that harm them. Policies can cover third party bodily injuries, property damage and personal injuries (libel, slander) that were your fault. The coverage can also pay your legal costs in case the affected party sues you.
3. Business Interruption Coverage
If an accident in the business, like a fire, forces a temporary closure, then this coverage can step in. It can help you recover income you lose during the closure.
4. Equipment Breakdown Coverage
Suppose that a piece of critical machinery, like a computer system or restaurant freezer breaks down. You need these systems, and this coverage can help you make repairs affordably and expediently.
5. Errors & Omissions Insurance
These are liability insurance policies that help you when you make mistakes in your professional services or advice. If you give a recommendation that backfires on a customer, coverage can pay for their losses.
6. Commercial Auto Insurance
Commercial auto insurance includes additional, enhanced coverage that applies to a business that uses or owns vehicles. Coverage can insure both vehicles owned by your business and an employee’s personal car used for business.
7. Employment Practices Liability Insurance (EPLI)
During your hiring, retention or termination practices, someone might allege that the business or its representatives behaved inappropriately, such as through discrimination, harassment or failure to promote. This coverage can help you fight back against these claims, regardless of their validity.
8. Directors & Officers Coverage
Should a lawsuit threaten the business, it could target individual leaders like presidents, CEOs or board members. D&O coverage can help these parties protect themselves if their decisions lead to problems.
9. Workers’ Compensation
Workers’ compensation provides supplementary income to your employees after they get hurt or sick as a result of their duties at work. If you don’t have this coverage, an employee might be able to sue for their injury costs.
10. Inland Marine Insurance
There are numerous types of inland marine insurance, but the idea of coverage is that it covers essential business equipment, cargo and materials when you transport them off your business’s property. If you ever haul equipment, you need this coverage.
11. Product/Completed Operations Insurance
When you make a product, it could harm someone else. Whether it is food or a toy, if it harms someone, this liability coverage can help you pay for the losses.
12. Cyber Liability Coverage
In the event that data on your computer systems gets lost or stolen, you might cause problems for your customers. This coverage can help you remediate those losses.
13. Key Persons Insurance
This coverage is similar to life insurance. Should a leader in the business, like the owner or a partner, pass away, this coverage can help cover the financial losses that might result.
14. Flood Insurance
If your business is in an area prone to flooding, then you might need flood insurance. Standard property insurance usually won’t cover such losses. Some businesses have to purchase this coverage, by law, so speak to your agent about your particular needs.
15. Commercial Umbrella Insurance
With all of these liability policies, you might feel very secure. However, even liability insurance has its limits. A commercial umbrella insurance can step in to cover excess liability claim costs after you exceed the limits of your policy.
Speak to your business insurance agent about how to tailor these policies to your exact needs. In many cases, you can get these policies as part of a Business Owners Policy, or BOP. A BOP is a package of insurance that allows small business owners to get essential coverage in one place. Therefore, you won’t have to do a lot of reaching just to get a policy.