Are You Carrying the Right Insurance?

Courtesy Alan Cleaver via Flickr
Courtesy Alan Cleaver via Flickr

Every business needs certain levels of insurance. Hopefully, you’ll never really need to use it, but it’s best to have it there just in case. Trying to figure out what kind of insurance you need can be quite the chore, so let’s make it a little easier for you.

The Traditional Insurances

A number of types of business insurance have been around for years, for good reason. These are types of insurance that, regardless of whether you are in warehousing, manufacturing, retail, or other type of business.

  • General Liability Insurance – The most necessary of all the insurances, General Liability covers the cost of your defense as well as some of the damages involved if you, your business,  your employees are involved in injury or property damage to another party. Even if your business’s involvement is minimal, or is proven to not being linked at all to the injury or damage, there are still costs involved in proving that. General liability will cover your legal defense and any settlements.
  • Commercial Property Insurance – If you have any physical property that is part of your business, you’ll need this insurance. Not only does it cover our place of business, but it also covers property that is part of your business. This can range from computers, to desks, to large pieces of equipment including machines integral to manufacturing or forklifts.
  • Product Liability Insurance – If there is any type of tangible product involved in your business, this is a necessary coverage. This coverage is essentially General Liability Insurance, but specifically for products that you manufacture, distribute, or sell commercially or to the public.
  • Workers Compensation Insurance – In all states, workers compensation of some sort is required. It should cover any medical costs incurred from an on-the-job injury, as well as the loss of wages from such an incident.

Less Common Insurances

These types of insurance aren’t going to be necessary for every business, but any business could consider them. It all depends what your business is.

  • Home-based Business Insurance – If you run a business out of your home, your homeowners insurance will not cover many business risks. They will sometimes cover property, but outside of that, you will need to consider extra insurance.
  • Commercial Vehicle Insurance – Whether it is one car or a fleet, any vehicle that is assigned to your business has to at least be covered with auto liability insurance. Many states also call for collision. Of course, if you do not have any company vehicles, this isn’t something that you need to worry about.
  • Cyber Liability/Data Breach Insurance – If you are storing your data electronically, if you have a website or blog, or you are otherwise dependent on information flowing through the internet, you may want this insurance. It covers you in the case of your system being hacked and information stolen, and also helps in the case of any suits arising over content or the effects from a website.
  • Business Interruption Insurance – In the case that damage to your business keeps you from doing business, this type of insurance can keep money flowing in to keep the business afloat. This includes paying worker wages and compensating for the lost income from business lost. There are often some stringent, peril-specific clauses with this sort of insurance.

So What Do You Need?

In the end, the insurance you need and how much is covered depends on what you feel safe with. General Liability Insurance is needed in the case of any business, and Workers Compensation Insurance is necessary if your business has employees other than yourself. Everything else is not necessary, but they all have their merits. What coverage you buy, and the levels of coverage, will all be determined by the size of your business, the type of your business, and how open to risk you feel you are.