Having the right insurance in place is essential for small and home-based businesses. Operating even the smallest business involves risk, as you’re providing a service or product to the public. This risk increases if you have employees who might get injured while on the job. It would, therefore, be advised to not operate any kind of business without proper insurance coverage.
Even one unforeseen event might have catastrophic consequences that could ruin the business or incapacitate it for months. Luckily, there are many policies designed specifically for small businesses that cover all types of scenarios and will protect you and your business in case of unforeseen disasters or lawsuits.
General Liability insurance
Also known as Business Liability Insurance or Commercial General Liability (CGL) insurance, even home-based businesses need this policy. It provides defence and damage if a business owner or their employees, services, or products are alleged to have caused bodily harm or damage to the property of a third party. For example, a company might inadvertently start a fire on the premises in rents. A restaurant patron might come down with suffer an allergic reaction. A doctor might misdiagnose a serious disease, causing a delay in treatment and / or a grievous injury or even death. Mistakes happen, and this is one of the basic types of insurance that most businesses need to acquire to account for that.
Professional Liability Insurance
Also referred to as Errors and Omissions (E&O) insurance, this policy defends and provides damages in the case of a business failing to provide the services it can reasonably be expected to provide. It’s important to note that the general liability policy does not provide this protection and that there’s a difference between the two policies. Professional liability insurance can apply to any professional, including lawyers, real estate agents, and spa workers. An example would be a situation in which a salon sent someone away with an unacceptable level of service, resulting in a lawsuit.
Workers Compensation
This policy should be implemented without fail as soon as a business hires its first employee. Workers’ compensation serves as protection in case the business is sued by the employee or their family for injury or death caused by their work with the business. Even low-risk businesses can suffer from this type of lawsuit, in cases of carpal tunnel syndrome, slip-and-fall, or other injuries. This policy covers medical treatment, disability, and death benefits for the employee.
Business Property Coverage
Whether the building that the business owner operates from is owned or leased, this policy can cover the actual structure of just the physical assets inside, including stock, machinery, equipment, inventory, etc. It’s also called contents coverage, and it protects physical assets from damage or loss. For example, if the building where the business operates is flooded due to a broken pipe, or if there is a fire that damages the furnishings and equipment, the insurance provider would repair or replace the damaged goods.
Vehicle Insurance
It’s wise to obtain this insurance for any business that uses a company vehicle. This coverage will protect the car driver and passengers from physical harm, while also protecting the business from being sued if the company vehicle is involved in an accident with a third party.
Business Interruption Insurance
In the case of a disastrous event, such as an earthquake or hurricane, your business operations will likely be interrupted, and it will lose income from an inability to provide the goods or services it usually offers. If your business requires a physical location to operate, such as a retail space, then you should consider this insurance policy, as it will compensate your business for income lost during the disaster.
Data Breach Policy
Data security is a concern for many businesses. If your company stores sensitive data about your customers or employees, then you’re responsible for protecting that data from hacking or theft. With the continuous advances of technology, many companies are finding this out the hard way. If either hacking or data theft were to occur at your business, this policy would protect you from the ensuing damage.
The right insurance policies will protect you and your business from financial loss in case of unforeseen disasters or lawsuits, and are an essential element of conducting business. Contact your insurance broker and find out what forms of insurance are advised for your type of business, then put them in place sooner rather than later, if you haven’t already.
Nezha Boutamine | Contributing Writer
