The Types of Insurance You Need When You Start a Business
Posted on: 7 September 2022
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Starting a full-fledged business requires an eye for detail, a sense of humour, and a lot of insurance coverage. Insuring your business is not like insuring your home or car; while the overall process may be similar — find an insurance company, discuss coverage, pay the initial premium — the types of coverage are vastly different. Some even sound very similar, yet they don't cover the same things. At a minimum, there are five types of coverage you should look at.
Business Insurance
Business insurance is the basic insurance. It's pretty much renter's insurance but for businesses. This insurance protects you from having to take large financial losses when your business suffers from accidents and damage. You may still have a deductible, but the insurance should cover most of what you need to replace.
Liability Insurance
Liability insurance ensures that any liability charges against you and your company will be covered, rather than you having to drain the company's bank account to pay because someone had a slip-and-fall accident on your property, for example. There are two types of liability insurance. Public liability is the type you'd use for harm that someone suffers on your property or as a result of your negligence. Product liability covers claims that someone was hurt by one of your products.
Indemnity Insurance
Indemnity insurance is similar to product liability, but it's used mainly for harm done regarding services. Maybe you got a fact wrong while providing services, and that cost the client a lot of money. If they file a claim against you, the indemnity insurance would cover the payout.
Flood Insurance
Just as a lot of homeowner insurance policies don't cover flood damage, neither does a lot of business insurance. If flooding could be a concern for your business, you'll need a flood policy. And remember, you don't have to have your office by water or in areas where cyclones are a risk in order to need that insurance. Heavy rain leading to localised flooding is something that can happen anywhere.
Commercial Vehicle Insurance
Your regular auto insurance, for your personal vehicle, won't cover fleets or other vehicles used for business purposes. You'll need a separate policy for any vehicles used for your business.
If this sounds like a lot, don't fret. Your insurance agent can help you choose good policies that can be bundled together to an extent. That helps reduce the number of premiums you will have to pay.
For more information about business insurance, contact a local provider.