Owning your own business can bring stress, pain, and uncertainty, but you can avoid much heartache by insuring your business and wisely selecting the right coverage your business needs.
Startup businesses define uncertainty with high-risk ventures on little capital, little sleep, and little certainty.
Most business owners do not understand the vast risks they must cover themselves for, which only adds to the anxiety owners cope with.
Luckily, large insurers, such as State Farm Insurance, cover almost every potential risk businesses may face, whether it be a home-grown project or a flourishing corporate body.
1. General Liability Insurance
Every business absolutely needs general liability insurance. A personal injury to you or any of your employees could result in an unwanted lawsuit, disrupting your business. With comprehensive general liability insurance, owners gain financial and legal assistance for any potential lawsuits.
While it may seem a bit much for a smaller corporation to consider this cost, consider a customer falling off the steps of your building because you forgot to flip over the welcome mat. Simple accidents like these could have owners paying for a customer’s medical bills for an indefinite amount of time- more costs, fewer profits.
2. Property Insurance
We know not all businesses own their own space, or if they even have a space, but if they are leasing, renting, or owning the space, owners are responsible for everything inside and/or outside the building. Property insurance can salvage all things lost in a flood or fire from inventory to equipment. However, not all property insurance includes flood damage.
The Insurance Information Institute says, “damage from flooding, including flooding generated by hurricane-generated storm surge, typically is not covered under a standard commercial policy, including a Commercial Package Policy (CPP) or a Business Owner’s Policy (BOP). Flood insurance is available from the federal government’s National Flood Insurance Program (NFIP).”
Related Article: Protect Yourself: 7 Types of Insurance Small Business Need
Many, if not most, of entrepreneurs start their work from home so the property insurance would be too much for a home-based operation.
3. Home Based Business Insurance
For all the ambitious entrepreneurs, trying to make an impact from home, you should know that basic homeowner’s insurance will not cover nearly as well as commercial insurance. If business owners work from home, they can easily contact their insurer for information on expanding their policy to home-based businesses.
4. Cyber/Media Insurance
The world has transformed into a technologically based world, so businesses need to keep up with the times and protect themselves in digital commerce. The internet harbors many malevolent individuals willing to destroy an establishment.
According to General Electric, cyber attacks like malware and hacking can cost companies hundreds of millions of dollars. Despite heightened cybersecurity, the problem is actually getting worse, not better. Cyber and media insurance recently arose as a means to address the growing issue, and there are currently more than 40 companies that offer some form of a cyber or media policy.
5. Product Liability Insurance
If your company produces a product, you probably make sure your product is produced to a high standard. The majority of your customers find your product is completely functional, absolutely effective, and utterly efficient.
There is that one customer that manages to get past all the safety approvals, ignores every hazard warning, and cracks every child proof feature: here comes a lawsuit. Out of the vast population, there are always those nagging variants that find a way to cause an issue with your company’s product. One person’s unfortunate use of your product can cost you millions in a lawsuit and taint your reputation in the marketplace.
This is why every company should not spend, but invest their money into product liability insurance. The safety blanket of product liability tends to any lawsuits and protects the company’s good name.
Owning the company comes with the responsibility of any and every potential risk you will face as a business entity. However, if you follow this advice, you can avoid the full blows of mayhem and protect your company for future growth.