When you start your new firm, you want things to go well and you want to be successful in the least possible time. While you ought to do everything in your capacity to ensure this success, a smart business owner also stays prepped for adversities. To be aware of potential risks that your start up faces and to gear up for them is the mark of a savvy entrepreneur. The first step in your risk protection is to take out the firm’s right kind of insurance.
There are many types of insurance that small business can take. However, what you need depends on the kind of business you own, the services you will offer, your firm’s size, the structure, and other aspects. Here is a brief intro to the different kinds of small business insurance:
General Liability Insurance
Every business needs a general liability cover to protect itself against claims by third parties. This insurance kicks in when a third party claims that he suffered property damage or injury due to your business/ your employees/ your products. For instance, a client comes in for a meeting at your office and on the way out slips on a wet floor and sustains injuries. Your insurance covers any costs that you have to bear if he files a lawsuit against you. This insurance also covers you if a customer’s property, say his laptop, was damaged by you or your staff.
Your business has its own assets such as office equipment, furniture, fittings, tools of trade, inventory, etc. You may also have your office space and warehouse. What happens if any of this is damaged in a fire or flood or is stolen? Your business will sustain a heavy loss in such situations unless you have adequate property insurance coverage. This insurance allows you to repair/ replace property quickly in such situations.
A business interruption cover is often a part of this insurance. This add on cover takes care of any loss you sustain because your business operations have been disrupted by the aforementioned events affecting your property/ assets.
Worker’s Compensation Insurance
Any business that has employees needs worker’s compensation insurance and in most states it is mandatory. This insurance works in two ways:
· When an employee falls ill or gets injured on the job, this plan covers the medical costs and wage loss. In this way, this insurance protects the employee from financial burden.
· For your business, this insurance ensures that you are not dragged into a lawsuit when such an incident happens. This is especially a risk when the worker is injured at workplace or the work has inherent health hazards. The benefits that worker’s compensation insurance offers to the employee come at a cost to them. They give up their right to sue you when such situations arise.
If your firm has vehicles that are used by employees for any purpose (travel to and from office, transporting goods, transporting clients), you need this cover. If any of your company vehicles are involved in an accident, your vehicle insurance kicks in and covers your costs. If your employees are found to be negligent in driving the company vehicle and they cause an accident, you could be facing massive lawsuits. This insurance is your protection in such cases.
Vehicle insurance may be of different kinds. Basic ones cover the injuries sustained by a third party. But you can also get policies that cover any damages that you may have to pay for such accidents.
Cyber Liability Insurance
This insurance assumes great importance in today’s world. This is especially critical for you if you store sensitive client details on your computers and those may be exposed during a data breach. You can be sued for this by all your customers if your company suffers a data leak situation.
If your systems have been breached, then not only do you have to spend to rectify the issue but also to defend yourself legally. In fact, even merely notifying all of those who are affected by the breach can be a costly affair. Your cyber liability insurance covers all these costs and ensures that your legal expenses are covered too, in case you have to battle a case out in court.
Professional liability Insurance
One of the most critical insurance covers that any service provider needs is professional liability insurance or the errors and omissions coverage. This insurance protects your company’s reputation and finances both in event a client files a lawsuit against you.
Imagine this scenario, your client believes that you provided delayed service, which resulted in some loss for him. He files a case against your firm. Now, you have two options. Either negotiate a settlement, pay a large sum of money and don’t defend yourself legally. In this case, the lawsuit does tarnish your reputation. Or, you can fight out the lawsuit in court, prove that your service was impeccable and protect your reputation. In the latter case, there is quite a substantial cost to consider. Court fees, attorney fees, damages- all of these can drain the finances from your business.
BUT, not if you have a professional liability cover. With this insurance in place, all of these costs are covered by the insurer. You do not have to worry about the financial drain and that leaves you free to battle it out in court to redeem your brand’s reputation. To learn more about this insurance visit bizinsure.com.
Different kinds of insurance protect your business from different kinds of risks. Get the right coverage and ensure that your new firm is safeguarded from potential risks thoroughly!
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