Business insurance makes a lot of sense because running a business can be risky. You never know when an accident or problem will come up and damage your store, put you in legal trouble, and leave you in a really tough spot financially. Restaurants, for example, are particularly prone to damage by fire or liability claims over food poisoning. A medical or dental practice may become the target of law suits by customers who feel they didn't receive satisfactory treatment. As a business owner, you may be at a disadvantage when trying to prove your innocence because there are a host of consumer protection laws and law suit funding firms working against you.
To protect yourself, there are a few types of insurance policies that you should definitely consider.
General Liability Insurance
General liability insurance covers you if you are ever sued for causing an accident or injury while running your business. For example, this policy would cover you if someone slipped and fell down on the wet floor of your store. This insurance policy would pay for your legal expenses and if you lose your court case, would also help pay for the financial settlement.
General liability insurance is incredibly important if you run your business from a store because customers will be coming in every day which means you are potentially risking a lawsuit every day.
If you work from home, you should also consider this insurance if you have employees or customers who come to your house.
Professional And/Or Product Liability Insurance
Someone could also sue you because of the results of your work, say because you failed to deliver the correct results or hurt someone with your actions.
Professional liability insurance covers you if you deliver a service like accounting work, financial advice, or medical care.
Product liability insurance covers you in case you are sued for selling a defective product that causes an injury or financial loss.
If your business property is damaged or stolen, property insurance would pay to replace the loss. These policies cover costly accidents like fires, windstorms, lightning, and burglaries.
Your insurance would pay to repair your store, rebuild the property, and replace your damaged/lost inventory after one of these events.
Business Interruption Insurance
While property insurance would pay to repair your store and replace your inventory after an accident, it takes time to put everything back together. During this stretch, you won't be earning any money which could put you out of business.
Business interruption insurance pays you money to help you through this stretch. This way you can keep paying your bills and replace your lost salary when your store is temporarily closed because of an accident.
Business Auto Insurance
If you need to drive for your business, you may need a separate business auto insurance policy. Your personal auto policy may not cover the damages if you get into an accident as a result of your work, forcing you to pay everything out-of-pocket.
You should contact your auto insurance company and let them know what you're doing with your vehicle for business. They'll let you know if you need a separate business auto policy.
Worker's Compensation Insurance
If you have employees, you may need to buy worker's compensation insurance on their behalf. This is a state-run program that provides disability insurance to workers if they get sick or injured while at work.
While every state has different rules, you are typically required to pay for worker's compensation insurance if you hire W-2 employees.
You worked hard to establish your business so don't let an accident erase all that hard work. By setting up the right insurance, you can rest easy knowing that your business and your finances are protected.
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