Which type of insurance does your business need?
Figuring out which types of insurance coverages are right for your company isn’t always easy. Here are four basic types of insurance policies that most businesses need to have —even the smallest of companies — and four other coverages that many business owners need but don’t realize they do:
Property insurance. This type of insurance covers buildings as well as personal property such as office furniture, inventory, computers and machinery. It’s basic coverage that nearly all businesses need.
Liability insurance. Having enough liability coverage is important for a growing company. Any business can face a legal claim that could be financially devastating. A client could sue after a fall in your office. A customer could file a lawsuit claiming a product is defective. Liability insurance can help a business prevent a financial disaster in the event of a lawsuit.
Commercial auto insurance. Cars driven for your business should be covered under a separate, commercial auto insurance policy.
Workers compensation insurance. Nearly all states require businesses that meet certain size thresholds to have workers compensation insurance in the event an employee is injured or dies on the job.
Depending on the type and size of the business, you may need additional coverage. Here are four types of coverage that business owners often don’t realize they need to protect themselves:
Cyber liability insurance. One study found that the average cost of a cyber attack on a company is $200,000; many attacks are more costly. Small and medium-sized companies are increasingly at risk for both attacks and devastating legal claims as a result of an attack. All businesses need to take steps to prepare for and help prevent a cyber attack and consider purchasing coverage in the event one does happen.
Employment practices liability. EPL is designed to protect companies in the event of a sexual harassment, discrimination, wrongful termination or breach of employment contract claim or any of a number of other claims made by an employee or former employee. The more employees you have, the greater the risk of a lawsuit.
Professional liability (also known as errors and omissions). Many different types of business owners need E&O insurance coverage. Businesses providing a service or advice have a unique type of liability exposure. Many E&O policies are designed for specific types of professionals, such as physicians. accountants, engineers, architects and attorneys.
Employee benefits liability. EBL is coverage for businesses that offer health insurance and other benefits. It protects them from errors and omissions that occur when employee benefit plans are administered by a company’s human resources employee(s). These types of errors happen more than you might think.