6 Types of Insurance Every Business Should Have in Place…The Christine Chronicles

Hello and Happy Friday,

Today’s newsletter covers a crucial topic that every business owner should understand.  Many new business owners just don’t have the capital to invest in multiple insurance policies which adds to their overhead….. at least until they receive greater cash flow. However, certain coverage is mandatory, such as workers compensation and auto insurance is you use your auto for your business.  Not having these coverages can bankrupt you after just one claim so do yourself a favor, and make sure you absolutely have these coverages. Without them, your personal assets are up for grabs and even if you have a business entity to provide asset protection, your business assets are still on the line.

If you are more seasoned in your business, invest in these other coverages to ensure that you are fully protected.  Insurance 121 is a full service Commercial Lines Brokerage firm here in Elk Grove. If you are looking for a professional to assist and educate you on these coverages, we recommend Nicolette Eberle with Insurance 121. Time is money in business and working with an insurance professional who provides great service to your company will save you money and free you up to work in your business and do what you do best.



6 Types of Insurance Every Business Should Have in Place

Before you open your business, it’s imperative to have proper insurance coverage. A single lawsuit or catastrophic event can wipe out a company before it even has a chance to get off the ground.

That said, there are many types of insurance out there, and some policies can be extraordinarily expensive, so it’s critical to know what specific risks your company faces and what types of insurance will best cover those risks. The following insurance types are among the most-often needed for practically every business, no matter how big or small.

1. General liability insurance

All businesses need general liability insurance, which covers lawsuits initiated by third parties (non-employees) for bodily injuries and/or property damage that are directly or indirectly related to your business. It’s important to note that such coverage—and indeed most coverage listed here—is needed even if you aren’t at fault. Remember: anyone can sue anyone for anything, and it’s the lawyer’s fees that will cripple your business, even if you are in the right. The right insurance will cover your legal fees.

2. Professional liability insurance

Professional liability insurance covers lawsuits alleging your professional services and/or advice caused a client to suffer financial losses, arising from actions like negligence, mistakes and omissions, and violation of contract. Such coverage is applicable for a wide range of businesses—accountants, lawyers, real-estate agents, consultants, IT firms, among others.

3. Property insurance

Regardless whether you own or lease your office space, property insurance is a must. Such policies cover damage to equipment, furniture, and signage from events like fires, storms, and theft. Some natural disasters, like floods and earthquakes, may not be covered, so be sure to check with your agent to add additional coverage if you live in a disaster-prone region. You may also want to consider business interruption insurance to protect your revenue if your company is unable to operate due to a natural disaster or other catastrophic event.

4. Workers’ compensation insurance

If you have any W2 employees, state law require workers’ compensation insurance, so it’s mandatory in many cases. Workers’ comp offers medical treatment, disability, and death benefits for employees. And even if your business is relatively low-risk, coverage is still needed for claims like slip-and-fall injuries and carpal tunnel syndrome.

5. Vehicle insurance

If your employees use a company-owned vehicle to conduct business, those vehicles  should have comprehensive commercial auto insurance to protect against liability as well as any injury/damage to your employees, vehicles, products, and equipment. If your employees use their own vehicles, their personal insurance often covers them. But it’s a good idea to purchase “non-owned auto liability coverage” in case an employee fails to renew their insurance or has inadequate coverage.

6. Employment Practices insurance

If you have employees, one of your biggest risks is getting sued by one of them. If you have employment practices insurance in place, however, a lawsuit against you would be covered by your policy.

As your Creative Business Lawyer®, we’re experts at helping business owners assess the legal risks they face and determine the insurance they need. Contact us today to discuss exactly what kind of insurance you need and what levels of coverage will best protect your company.

This article is a service of Christine Faulkner, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.

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