Aside from meeting the legal requirements, having the right insurance can protect your businesses from liabilities. For new business owners, however, choosing among various types of small business insurance can be a daunting task. What are the difference types of coverage and what are the right ones for your business? Let’s take a look at some of the most popular insurance coverage that a small business may need.
Small Business Insurance Coverage
Commercial General Liability
This type of insurance covers property damage or personal injury caused by the actions of you, the business owner, or an employee of the business. If someone gets hurt on your property, this insurance can protect you from financial obligations, including medical expenses in case of injuries. It can also cover the cost of repair or replacement in case of property damage. The small business insurance can also provide coverage for legal fees and any compensatory and punitive damages arising from lawsuits.
Product Liability Insurance
To cover property damage or personal injury caused by your product, you would need a Product Liability insurance policy. The product can be something that you design, manufacture or sell. The damage can be the result of a design flaw, an error during manufacturing, or the lack of instructions or warning of potential risks. The extent of the product liability can be different from state to state. Often, the suits are against all the people involved in the process of designing, manufacturing and selling the products. Often, even if the damage was accidental, you still can be liable.
This small business insurance coverage is for the equipment, furniture and fixtures that your business owns. This can be included with the commercial liability coverage. Many business owners assume that if they have a home-based business, the equipment and furniture are covered by the homeowner or renter insurance. However, business assets can be excluded from such policies. Check your existing coverage to see if the property of a home-based business can be covered.
Professional Liability Insurance
This small business insurance is also called errors and omissions insurance. This insurance covers liability resulting from a mistake or malpractice by a professional. Certain professions require professional liability insurance, such as doctors, financial advisor or lawyers.
Commercial auto insurance
If your business owns a commercial vehicle or employs dispatched or delivery drivers, you may need a commercial auto insurance policy. Your personal auto insurance may not cover commercial use, such as delivery, leasing vehicles, or taxi services. To find out what coverage you can obtain for your commercial vehicles, talk to your insurance provider.
Having the right type and adequate insurance coverage is important to protect your business from potential liabilities. Before signing a contract, be sure to review all the terms of the insurance policies and make sure that you meet at least the minimum coverage required by law. When in doubt, consult a legal expert to learn about the insurance requirements and recommendation for your business and profession.
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