Does My Business Really Need Insurance?

If you are asking this question than the answer is ?Yes!? Many small businesses overlook their company?s insurance needs. Every business should have insurance, but the insurance they need depends on a wide variety of factors like industry or business type. This is a breakdown of the most common types of business insurance and the questions to ask yourself when determining whether or not each type of insurance is something your business needs.

Liability Insurance

Every business needs some kind of liability insurance. If you?re at risk of being sued by a client or customer for negligence or misinformation which could result in significant damage to your business then you need a liability insurance policy. Liability insurance can appear under different names in your review policies. It will depend on the industry you are in.

• Public: Public liability claims typically fall into two main categories: personal injury (both physical and psychological) and property damage. Property damage claims tend to be higher in number, but are generally lower in cost (ACCC).

• Product: If you manufacture or supply goods, you?ll want to look into product liability insurance. This type of insurance covers your business in the event your product causes harm/injury to someone resulting from a manufacturing, marketing or design defect.

• Professional/Errors and Omissions: IT firms and consultants must consider a professional liability insurance policy. Covered incidents may include errors and omissions that result in a loss of client data, claims of non-performance and negligence leading to a loss of money, customers, etc.

Health and Workers? Compensation

Workers? compensation insurance is state-mandated coverage for injuries and illnesses that are job-related, and is required by employers in every American state except Texas, where it is voluntary. Health insurance will keep your business competitive as you try to recruit top talent. It is a benefit many entering the work force are looking for in a company.

• The two most common types of health insurance are now HMO and PPO plans. HMOs are organizations of doctors, hospitals, and care providers that have agreed with an insurer to provide medical care at a lower, negotiated rate; PPOs are a bit more restrictive.

• Workers? compensation insurance is where the employee is not allowed, by statute, to sue their employer for on-the-job or work-related injuries. In return, the employer must participate in a workers? compensation program that provides nearly automatic payment to the employee in case of injury for medical bills and damages.

Auto Insurance

Your business may not have company vehicles, but if you have even just one that is tied to your business, you need commercial car insurance. Your personal auto insurance will not cover company vehicles so it is important to make sure your drivers and vehicles are covered under a commercial policy.

• Commercial auto coverage insures against property damage to vehicles and damage caused to others by those vehicles. Most personal auto policies exclude from coverage the use of a vehicle for commercial purposes, though a non-owned auto policy will provide coverage to the business when employees use their personal vehicles for the business.

• Some businesses have found they can save on commercial vehicle insurance by investing in a GPS tracking software for those vehicles. If you have more than one vehicle or are looking for ways to save, consider a software solution.

While these?aren?t?all the insurance policies that your business can benefit from, these are the three most common. You should consider these insurance options before a claim against your company takes place. Sitting down with an insurance or business consultant can help guide you in the decision making process. Before you buy, make sure to shop around to compare pricing and coverage available.

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About the Author

?Erica Bell is a small business writer who focuses on topics such as errors and omissions insurance and commercial vehicle insurance providers. She is a web content writer for Business.com.

Source: http://www.informationgateway.org/business-insurance/

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