A Simple Guide to Business Insurance For Startups

Running a business of any size can be an uphill task; strategies to win over clients, compete in already crowded markets, and handling customers both internal and external. It is a risky venture, which can be menacing even to the most seasoned entrepreneurs. However, there are some things over which the business owner still has a good degree of control. While one cannot control any damaging natural causes or nasty lawsuits, proper insurance will save a business hefty loses.

Building towards the Right Business Insurance Cover

Which insurance covers work for you? Well, given that the business is multifaceted, you’ll require a cover that ensures that business runs smoothly regardless of the usual hick ups. If your business involves collecting and storing sensitive data, you may want to ensure that you have protected your networks and information against cyber-attacks and related liabilities even as you provide data security to avoid law suits. If you live in an area that is prone to natural or artificial disasters, you might want to get a cover against that.

Small Business Insurance Covers

General Liability Insurance

This cover ensures that the business keeps running even after normal workplace mishaps. It is one of the most essential business insurance covers. It insures the business against general liability injuries caused by negligence. This cover pays hospital bills and any legal costs and settlements that may come with an accident that occurs on the business premises.

While a general liability cover does not make the business immune to lawsuits, it offers adequate protection in the event of a financially crippling lawsuit. A business operating under a corporation or LLC registration further ensures that personal assets are not vulnerable to business liabilities. General liability cover is one of the most critical components of business insurance.

Property Insurance

This applies to businesses that own properties. These properties include buildings, office equipment, business inventory, electronics and other tools used at the workplace. The property insurance cover protects against damage or loss caused by elements such as vandalism, fire, floods, theft, smoke among others. The business can also insure against interruptions to business operations that may lead to loss of earnings.  

Most insurance service providers will tell you that this cover comes with limits and deductibles. The deductible is the amount payable towards the claim amount of the cover. The business is at liberty to choose the deductible based on the desired benefits. The limit refers to the maximum amount the insurance service provider gives when a claim is placed. The limit is based on the deductible as well as the estimated costs of replacements, rebuilding or repairs.

Workers Compensation

This cover insures employees against any injuries sustained at the place of work. As such, the cover comes with medical benefits for injuries sustained while working as well as wage replacements in the event that the injury makes it impossible to work for a period. 

When the employee is given these benefits, they give up the right to sue the business for the incident. This cover saves the business great deals of trouble in-case of any legal complications pertaining to employee accidents. It is important to note that it is mandatory to have this cover for a specified category of employees. Be sure to familiarize yourself with the legal requirements regarding employee safety.

Commercial Vehicle Insurance

This is a policy that covers any vehicles owned by the business. The business vehicles may be used to carry company equipment, products or even employees. The auto-insurance can cover business vans, errand cars and even trucks against collisions and damage.

There are instances where the business may not own vehicles but employees use their own to carry out business operations. As such, the business should have a non-owned auto-insurance to compensate the owners’ cover in case it is not adequate. The non-owned auto insurance can be part of the larger business owner’s policy.

Business Owners Policy

This can be referred to as the umbrella policy for the small business owner. Business Owners Policy mostly includes insurance against any business interruption that leads to loss of revenue, liabilities and crimes against the business. The owner can choose the specific needs against which the business needs insurance. This is a simple, cheaper way of insuring against all business threats as opposed to taking individual policies for each need. The BOP can include general liability issues, property insurance, crime cover and auto insurance for business vehicles.

Remember

There are a few more insurance covers that you can take depending on the specific business operations and the risk they pose. Such additional covers include data breach policy, professional liability insurance, renters insurance, officers and directors insurance against any decisions that may affect business profitability, among a whole range of other risks. 

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