“A small business is an amazing way to serve and leave an impact on the world you live in.”
Starting your own business is a dream for many and determined people have been seen to accomplish their dreams. Running your own requires a lot of hard work and dedication. People invest the majority of their lives to see their business flourish. Yes, many fail to but there’s no harm in trying. If you are one of those lucky individuals who have been successful in starting up your own personal business, then we have outlined a guide for you which can help in protecting your business. Following is an easy guide that can assist you:
What is business insurance and how is it significant to your business?
Business insurance helps your business in tough times when faced with a challenge. It provides coverage against losses and unforeseen events faced by your business. Having business insurance can be very significant for the survival of your business. The foremost is that it can help when your business faces events like fires, financial risk, and much more. Business insurance prevents your business from bankruptcy in case of these events. There are numerous types of coverage being offered by the insurance agencies ranging from property damage to liability coverage insurances.
Confusion regarding LLC (limited liability Company)
Many business owners don’t have a clear understanding of limited liability companies. They tend to mix it up with business insurance. Basically, LLC does provide some kind of assurance to your business but not as much as what insurance does. LLC essentially protects your business finances against lawsuits. How this works is that let’s assume that one of your employees fails to carry out his/her job correctly and because of that, a customer is harmed. Then LLC comes in place and you won’t have to pay for the medical expenses of the injured customer or anyone out of your business. But let’s be clear, business insurance protects your business from bankruptcy and is very essential for you to opt for.
Is having business insurance obligatory by law?
Every country has its own laws and policies regarding how a business has to be run. In the majority of the states, it is made obligatory by law to have some kind of insurance if you have employees working. It’s called worker’s compensation as it’s the duty of the employer to protect its employees at all costs. Therefore, a worker’s compensation insurance plan is opted by the owners of new businesses for the best interests of its employees. This insurance plan covers the medical expenses and the lost salaries of its employees due to different reasons for instance if anyone gets injured on work. For extra protection, business owners can opt for employment practices liability insurance. This insurance gives coverage from legal actions against your business and rulings given for certain unintentional and wrong employment practices.
Additionally, when starting a business, you’ll need to acquire space where you’ll be able to conduct your operations. It’s a general practice carried out by landlords, vendors, and other partners that demand you to carry out general liability insurance if you want to get into business with them. General liability insurance has many benefits as it gives coverage to any lawsuit that your business comes across as it may be from its clients or individuals, including for false advertising and defamation. If we look at the insurance options, there are a further variety of options that you can apply to your business that can help protect you from risk. To best safeguard your company’s financial interests, you can consider a commercial umbrella insurance policy, which increases a further limit to all of your underlying liability policies. This umbrella insurance policy helps to prevent your business from excess liability judgments for loss, damage, or even death caused by negligence. It’s structured in such a way that grants you extra liability protection over the insurance policies that you have opted for your business.
Recommendations for new and existing businesses:
First, we need to realize that every business is distinct from each other. But just to give you an idea, we look at the common coverage plans that can be applied to new and emerging businesses.
- Business Owner’s Policy (BOP)
This policy incorporates three significant types of coverage plans to help you save your money and best provide coverage to your financial interests
- General Liability
- Property & business interruption
A Business Owner’s Policy (BOP) gives coverage to your business in case there is any property damage or if someone gets hurt at your workplace or caused by your business while working on a project. This policy also gives assistance if you need to replace lost or damaged property and recover the costs of lost work time.
Cybercrimes have increased and these criminals have made an opportunity for themselves out of all of this. These criminals that with the use of technology have found loopholes and are targeting every business and hurting them badly. The best option to keep you and your business safe from these cybercriminals are to get cyber insurance. This insurance can help you in minimizing loss if you become a victim of these criminals. Also, some insurance companies provide small businesses with risk management services that provide free or discounted risk assessments, employee training, and protective hardware or software.
Commercial auto insurance is another option that provides protection to your business in case there is any damage to your business as well as bodily injury and property damage to your customers and others. This insurance also gives protection to your business from hefty lawsuits and legal action if you’re at fault in an accident. Having liability insurance is compulsory and authorized by law in every state of the nation
Yes, we understand that sometimes it gets very confusing which insurance policy to opt for as each business differs from one another. Therefore, a licensed agent can help you figure out the best coverage plan for your business.
Once you have gotten an insurance plan for your business, It’s an idea to review your needs every now and then before you automatically renew your expiring policy. Like said before, the licensed agent can help you with all this. You may require a new or different coverage if:
- Your income suddenly jumps
- You make a change in operations (such as introducing a new product)
- You enter into an agreement