Do You Know What Type of Insurance Your Small Business Needs?


Do you know what type of insurance your small business needs? You should already have several insurance policies for your business. But if you are not sure what type to put in place, here's a guide to insurance for small business owners:

Do you know what type of insurance your small business needs? You should already have several insurance policies for your business. But if you are not sure what type to put in place, here's a guide to insurance for small business owners:

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Insurance works on several levels

On a purely financial level, they are a good way to avoid paying out hefty fees or penalties.

With regards to legal concerns, all business owners are mandated by law to purchase a certain amount of insurance to cover all kinds of contingencies.

Finally, on a public relations and managerial level, insurance can be considered as tools for risk management, whereby you protect both your employees and your business interests from unforeseen disasters.

So considering the risky nature of many businesses, insurance is simply a smart way of planning for the future.

However, when you go to an insurance broker or insurance provider, you will be given a wide selection of insurance coverage to choose from. Obviously, most small businesses cannot afford to get all the different kinds of insurance on offer, which is why it's important to choose only the ones you need.

To help you do this, here are some of the most popular types of insurance coverage for small businesses, and what they are designed to do. By knowing what each type of insurance coverage has to offer, you will be better equipped to purchase an affordable insurance package for your entire company.

Property Insurance

If you have a small establishment that needs to be insured against losses resulting from natural and man-made calamities then you will need property insurance policy. This type of policy covers not only your place of business, but also the assets found therein, such as furniture, computers, supplies and all other kinds of equipment.

This type of insurance is designed for business owners who are concerned about fire outbreaks, natural calamities and any event where company assets are either damaged or destroyed.

Recommended reading: A Quick Guide to Small Business Insurance

Life Insurance

Aside from your company's hard assets, it's also important to protect the lives of your personnel and employees and for this, you will need to life insurance policies. Life insurance is not only an attractive incentive for some employees, it's also a necessity for certain occupations.

If you run a business where certain physical risks exist then you will be expected to provide your employees with sufficient life insurance coverage as a matter moral and legal responsibility.

Public Liability Insurance

Another important type of insurance for small enterprises is public liability insurance. Unlike the insurance policies that you buy for your personnel and business assets, liability coverage only deals with accidents where the injured party was harmed due to your business' operations, and where you are obligated to pay them a certain amount of money for damages.

This type of insurance is meant to cover and mitigate financial risks by covering the costs of damages, legal fees and any other expenses that may result from the accident.

Home Based Business Coverage

If you run your business from the comfort of your own home then you may need to get a home based business insurance policy. Although not quite as popular as other forms of insurance coverage, they do provide a reasonable amount of protection for any type of business which falls under the home based category.

Insurance Coverage for Important Documents and Records

Aside from your assets, you will also need to protect your business records. To do so, you will need to get valuable papers coverage to in order to protect both hard and soft copies of your documents. This type of insurance coverage is designed to cover all the relevant costs of replacing essential documents up to a certain limit. So if your company keeps a lot of important records,like say if you were an accounting firm, then this is an important insurance coverage to have in place.

Recommended reading: 5 Types of Insurance a Small Business Owner Should Have

Employers Liability Insurance

Employers liability insurance protects your business against your legal liability for injury, illness, disease or death of any employee under a contract of service with your business.

When we consider all of the various risks involved in running a growing business, it's important to manage them as much as possible. Insurance policies are some of the most obvious and most accessible tools for you to use, so use them wisely.

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