7 Necessary Insurance Policies that Your Business Needs

necessary insurance policies

Starting a business can be exciting, but it also involves risks. It can be challenging for a new entrepreneur to learn about and foresee the various risks and their consequences. Nonetheless, different types of necessary insurance policies will help protect the business owner and safeguard them against these risks.

Types of Important Insurance Coverage for Your Business

1.General Liability

General Liability insurance plans (or Private General Corporate Liability) shield corporations against contractual liability for damages to property or personal accidents sustained by you, your workers, or your goods and services.

2.Commercial Auto Insurance

Company owners and workers traveling for work purposes or delivering goods or supplies would not be protected under personal auto plans. However, commercial vehicle insurance plans protect against the slightest possibility of financial liability due to injuries and litigation.

Furthermore, personal car insurance plans would not protect workers commuting for work or delivering goods, making it necessary for the business owner to purchase commercial vehicle insurance.

3.Property Insurance

Property insurance covers the corporation against any unexpected disastrous events such as explosions or floods, which may place corporate properties and real estate in danger. Additionally, other criminal activities such as arson and robbery may be included in accidents.

These policies can be of two types: 1) All-risk policy, which mostly includes all accidents, and 2) Risk-specific policy, which outlines some incidents. As with commercial car insurance, these policies guard against potentially significant financial risks that would result in substantial losses for your company.

4.Workers’ Compensation

This insurance helps provide the staff with benefits if they are hurt at work. It will also offset treatment and recovery bills for workers. Although it is required by law in most jurisdictions, it also protects you as a company owner.

Your workers, for example, lose their right to sue your company for wrongdoing, thus reducing your liability to legal complications.

5.Life Insurance

Life insurance policies for employees provide death benefits to their surviving families, but the company benefits as well. The corporation pays a premium to provide this insurance for their employees to help shield them from the direct effect on business activities due to the death of a valued employee.

It also brings financial assurance to the loved ones impaired by the sudden death of a family member.

6.Data Breach/ Cyber Liability Insurance

The need for this insurance coverage can’t be overemphasized, especially during the COVID-induced lockdown where most of the businesses have been operating from home. If your business handles or stores client/customer related sensitive information, having the right cyber liability coverage will protect your business from being sued or penalized in the event of a cyber attack. It will also provide you with funds needed for immediate response to customer grievances, thus restoring their confidence in your business.

7.Business Owner’s Policy (BOP)

Business Owner Policies particularly take into consideration both liability risks and protection of major properties.

BOPs often include the following insurance; mortgage, loss of revenue, liability, breach of records, medical payments, malfunction of facilities, and work processes interruption and liability insurance.

It is worth noting that BOPs do not cover occupational liabilities, vehicle insurance, employers’ compensation, or life and disability insurance. BOPs, however, do save small business owner’s time and resources in learning about which specific insurance coverages they need to buy.

For extra peace of mind, make sure to purchase the perfect business insurance coverage. Contact the team at American Premier Insurance, serving Phoenix and neighboring cities in Arizona to get access to the right business insurance for your needs.