When your business is completely dependent on your success, it is not sufficient to have a backup plan. You also need the right insurance coverage to protect your business and your assets. Your business is exposed to many risks, and without insurance you may not be able to protect what you have built up.
Every business needs insurance to protect themselves, their employees, and their operations. Your company should also have the right business insurance policy. Let’s look at what it should cover.
What Coverage Do You Need?
Business insurance provides protection. It prevents you from losing assets, such as cash and inventory. It also protects you against risk, such as a customer suing you because they got injured on your business premises.
You’ll need coverage based on the type of business you own and the nature of your assets and operations. Consider having at least the minimum coverage required by state law, but as your enterprise grows and your assets accumulate, you might consider increasing it.
Typically, business insurance coverage falls into two main categories: risk coverage and asset protection.
Risk Coverage & Asset Protection
A business insurance broker can guide you as to what risk coverage and asset protection is right for your business. Insurance agents aren’t regulated like doctors or lawyers, but they do need to be licensed. They can help you choose the best policy and ensure that your business is adequately protected because they have experience in business insurance.
Risk coverage protects your business from unknown risks. This can include coverage for damage caused by fire, lightning, explosions, theft, windstorms, earthquakes, and floods. Fire and “arson” are just two examples of the perils covered by fire insurance. “Arson” is the term insurance companies use when their customers’ buildings burn down. “Fire” is used to describe burning assets for customers. Other fire insurance perils include lightning, explosions, and windstorms. Another risk that insurance can cover is theft.
An asset protection policy covers assets you own and use for your business. You may be protected from lawsuits brought by your customers. In addition, there may be lawsuits stemming from the sale of goods or services you provide to customers, lawsuits relating to the property of the business, or lawsuits relating to its employees. Insurance covers you for a certain amount but may not cover all claims.
Before you choose a specific type of coverage to include in your business insurance policy, you must understand the possible risks your business could face. This will help you determine what coverage you need and which types of coverage you want to include in your policy.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being outdoors and researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.