Are you covered?

Insurance 101: Getting the Coverage You Need

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According to the U.S. Small Business Administration (SBA), “business insurance protects you from the unexpected costs of running a business.” Accidents, natural disasters and lawsuits are all potential problems significant enough to shut down your business if you’re not properly prepared and covered for them.

The federal government requires every business with employees to have workers’ compensation, unemployment and disability insurance. Some states require additional insurance as well. The SBA lists six common types of business insurance that small businesses should consider. It’s also smart to consult an insurance agent to make sure you’re covered specifically for the type of business you do.

General Liability Insurance
Every business needs to have this type of insurance. General liability protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits and settlement bonds or judgments.

Product Liability Insurance
Businesses that manufacture, wholesale, distribute or retail a product need product liability. Say you put out a defective product and it harms someone. This will protect you against financial loss.

Professional Liability Insurance
Any business that provides a service to customers should have professional liability to protect against financial loss as a result of malpractice errors or negligence. General liability does not cover this, and it’s especially important for attorneys, accountants, consultants, notaries, real estate agents, insurance agents and even hair salons.

Commercial Property Insurance
If you have a significant amount of property or physical assets related to your business, then you are going to want to protect them. Commercial property insurance protects against loss and damage of company property (including equipment and inventory) due to issues like fire, smoke, wind and hail storms and vandalism.

Home-Based Business Insurance
Do you work from home? You can add this coverage to your homeowner’s insurance as a rider to protect your business equipment and as liability coverage for third-party injuries.

Business Owner’s Policy
Home-based businesses should consider this one, but it’s also good for any small business. This policy, called BOP, combines all of the typical coverage options mentioned above (and more) into one bundle, ultimately saving you money.

General Liability Insurance Every business needs to have this type of insurance. General liability protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits and settlement bonds or judgments. Product Liability Insurance Businesses that manufacture, wholesale, distribute or retail a product need product liability. Say you put out a defective product and it harms someone. This will protect you against financial loss. Professional Liability Insurance Any business that provides a service to customers should have professional liability to protect against financial loss as a result of malpractice errors or negligence. General liability does not cover this, and it’s especially important for attorneys, accountants, consultants, notaries, real estate agents, insurance agents and even hair salons. Commercial Property Insurance If you have a significant amount of property or physical assets related to your business, then you are going to want to protect them. Commercial property insurance protects against loss and damage of company property (including equipment and inventory) due to issues like fire, smoke, wind and hail storms and vandalism. Home-Based Business Insurance Do you work from home? You can add this coverage to your homeowner’s insurance as a rider to protect your business equipment and as liability coverage for third-party injuries. Business Owner’s Policy Home-based businesses should consider this one, but it’s also good for any small business. This policy, called BOP, combines all of the typical coverage options mentioned above (and more) into one bundle, ultimately saving you money.

Sources:

Forbes-Types of Insurance Business Owners Should Have

SBA Business Guide-Launch Your Business

MidSouth Bank partners with business owners in a number of industries of every size to provide insurance premium financing for most types of commercial insurance, such as property, liability, umbrella, fire and auto policies. Click here to learn more about our Insurance Premium Financing opportunities.

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