Do I Need Business Insurance to Protect My Company?
- Commercial Property
- Do I Need Business Insurance to Protect My Company?
Like any other insurance policy, business insurance isn’t a one-size-fits-all product. But you need to understand the basics to be able to answer the simple questions, “Do I need business insurance?”
After all, you wouldn’t drive a car off the lot without making sure your auto insurance policy was updated (even if you could), and you wouldn’t buy a new home without making sure your homeowners policy was in place to protect you in the event of a disaster. So why should your business be any different?
In reality, your business, no matter how big or small, is the culmination of years of hard work and investments. Not only do you want to ensure you’re protected on both a liability and legal level, but the same emergencies that could impact your home or vehicle could also apply to your business.
What Does Business Insurance Cover?
While the exact details of the business insurance policy that’s right for you will depend on the specifics of your business, there are five main categories of business insurance that policies typically fall under:
- General liability coverage includes bodily injury and property damage.
- Product liability coverage protects against loss or legal action related to a faulty or defective product.
- Commercial property insurance covers your main office or space you typically conduct business out of.
- Workers’ compensation coverage protects your employees if they’re injured on the job.
- Commercial auto insurance covers vehicles used primarily for business needs.
The most commonly utilized forms of business protections, general liability and business property coverage, are often infused into what’s called a Business Owner’s Policy (BOP). The Business Owner’s Policy serves as the foundation of many policies. From there, you can customize your coverage by adding or removing things based on your business’ needs.
How To Get Business Insurance
Depending on the specific industry your business is categorized as (including healthcare), there may be some specific insurance providers that tailor their products to your needs.
As with any type of insurance coverage, you should never “set it and forget it.” Instead, you should be aware of the different insurance providers that can offer you coverage and potentially shop around when it comes time to renew your policy to ensure you aren’t overpaying.
Do I Need Business Insurance?
Most businesses, no matter their size, need business insurance to protect themselves and their employees. In some cases, it may even be required by your state (more on that later). But given how much is riding on your ability to conduct business day-in and day-out, shouldn’t you be serious about protecting it?
Insurance policies, including business insurance, exist to protect you, your property, your employees, and your brand in the event of an emergency. Given this, there are very few instances where business insurance isn’t recommended.
How Much Is Business Insurance?
The average cost of a Business Owners Policy is typically between $80 and $100 a month, and workers’ compensation coverage typically runs between $75 and $95 a month.
Because the price is based on the details of your policy, the price of business insurance will fluctuate based on the level of coverage you select, the size of your business, your number of employees, and the coverage limits you pick.
But don’t let that scare you. For most businesses, these costs won’t break the bank and can be extremely minor in comparison to the cost of paying for the damages or legal expenses related to an incident or loss.
Is Business Insurance Required?
If you have employees or are planning to hire employees, you’re legally required to have workers’ compensation converge for them. This coverage exists to protect them if they’re ever injured or assaulted on the job and helps to mitigate your legal responsibilities in these situations.
Additionally, if you have a vehicle that’s primarily used for businesses use, you’re legally required to ensure it has an auto insurance policy, and your insurance provider may make you take out a commercial auto insurance policy.
Don’t forget, if your vehicles only or primary use is for business, your insurance provider can deny claims against a conventional auto insurance policy if you don’t have the right level of coverage.
The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.