Today's businesses need insurance for a great many things,
from liability to covering business vehicles and more. There's often a lot of
confusion about what insurance your business will need, especially as more
businesses use their homes for their office. Here is a handy list of the main
types of insurance you will need for your business, and why you will need that
insurance to be successful, and compliant with your local business laws.
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1. General Liability Insurance
No matter your business, you need liability insurance, even
if your business is based out of your home. This insurance provides defence and
damages if you, your products and/or services or your employees are involved in
an incident that causes (or allegedly causes) bodily injury or property damage.
2. Professional Liability Insurance
Often referred to as "Errors & Omissions
Insurance," this policy protects your business in the event of failure to,
or the improperly rendering, of promised services. It's an important insurance
to have because, quite simply, people make mistakes. If you or your company
fail to do what they promised to do, this insurance will help pay for defence
and/or damages, helping you take responsibility without endangering the
financial future of your company.
Note that this insurance is generally not offered in general
liability insurance policies.
3. Property Insurance
While not mandatory, if you own a building, equipment,
computers or almost anything related to your business, you should look into
property insurance. The policy will protect you in the event of a disaster,
like a fire, and against things like vandalism and other crimes.
Another aspect of this insurance is loss of earning and/or
business interruption insurance, which will pay you out as you recover from the
event that interrupted your normal business operations.
4. Commercial Auto Insurance
If your company has vehicles, they will need to be insured
by the business, whether they are used by employees or yourself. So long as
those vehicles are used to carry people, products or equipment, they should be
insured under your business with a commercial auto insurance policy. The
insurance will protect you in the instance of damage or collisions.
If your employees use their own vehicles for work, you will
still need a policy that protects the business in the event that something
happens when the vehicle is being used for commercial purposes. This is called
"non-owned auto liability insurance."
5. Worker's Compensation
When employees or owners are injured on the job, worker's
compensation ensures that they receive an income to help them through their
medical issues and time off for medical procedures. The insurance also means
employees give up their right to sue their company, which is very important for
business owners. Worker's compensation insurance is mandatory in some places,
so it is important to understand the legal requirements in your area for this
insurance.
6. Directors and Officers Insurance
With this insurance, your business' leaders will be
protected against their actions that may impact the profits, profitability or
operations of your company. Essentially, if your directors or officers end up
in a legal situation stemming from their actions, this insurance can cover
costs involved with defence and, in some instances, damages resulting from
those actions.
7. Homeowner's Insurance
If you run your business from home, you will need this
insurance. It may be mandatory depending on your mortgage but it is imperative
that you notify your insurance company if you are running a business out of
your home. Without the proper insurance, certain incidents may not be covered
by your standard insurance because it is related to an unreported business.
Contact your insurance provider before you start running a business out of your
home to ensure you are compliant, and covered.
Whether or not your business is run out of your home, an
office, or on the road, you will need multiple kinds of insurance to account
for liability, accidents and other incidents.