6 Types of Business Insurance to Consider

Owning a business involves risks. One catastrophic event or lawsuit can wipe out a small business even before it gets off the ground. The good news is that businesses can choose from a wide selection of insurance types that protect your company against these pitfalls. Here are the most common insurance types a business should have in place.

business insurance
photo credit: atomicjeep / Flickr

General Liability Insurance

General liability insurance is a common purchase among business owners. It covers legal problems due to injuries, accidents, and claims of negligence. These policies guard against payments associated with cases of libel, slander, property damage, bodily injury, medical expenses, the cost of defending lawsuits, and settlement judgments or bonds required during appeal procedures.

Product Liability Insurance

Companies that retail, distribute, manufacture, and wholesale a product may be liable for its safety. Product liability insurance covers financial loss resulting from defective products that cause bodily harm or injury. How much insurance you should buy depends on the kind of products you sell or manufacture. For example, a small appliance store carries more risk than clothing store.

Professional Liability Insurance

If your business provides services you should consider obtaining professional liability insurance (often referred to as errors and omissions insurance). With this coverage your business is protected against errors, malpractice, and negligence while providing services to your customers.

Based on your profession, your state government may require you to carry this policy. For example, certain states require medical doctors to purchase malpractice insurance.

Commercial Property Insurance

When you need coverage for everything related to property damage and loss due to a wide range of events such as vandalism, fire, and hail storms, property insurance is the way to go. The definition of “property” is broad, and includes money, lost income, business interruption, company papers, computers, and buildings.

There are two basic property insurance types:

  1. All-risk policies covering various perils except those cited in the policy;
  2. Named perils policies that only cover perils listed in the policy.

Commercial property insurance

Understanding this type of insurance can be challenging – therefore, it’s a good idea to talk with a local insurance specialists. If you reside in Denver, consult a Denver insurance agent about a commercial property insurance policy best suited for your small business.

Workers’ Compensation Insurance

Once you hire your first employee, add workers’ compensation insurance to your business’s insurance policy. This covers disability, medical treatment, and death benefits in case an employee is injured or dies as a result of working with your business. Even if an employee performs seemingly low-risk work, medical conditions such as carpal tunnel syndrome or slip-and-fall injuries may result in a pricey claim.

Home-Based Business Insurance

Contrary to popular belief, homeowners’ insurance policies do not normally cover losses associated with home-based businesses. Depending on the risks to your business, consider adding riders to your homeowners’ policy can to cover typical business risks like property damage. However, a homeowners’ policy only go so far in covering a home-based business and you may need to buy more policies to cover additional risks, such as professional and general liability.

There is insurance coverage for every possible risk to your business. You can discuss your specific business needs and insurance options with a Denver insurance agent. The agent will advise you on the right types of insurance you should consider buying. When you have the right insurance in place, your company can avoid major financial losses.