Opening your own business is one of the most exciting, worrying, happiest, and busiest things you will ever do in your life. Striking out on your own is an experience akin to leaving home for the first time, and realizing that you own the show now, and have to perform. You’ve already covered your business licenses, figured out if you’re a sole proprietorship, partnership, LLC, or corporation, and bought a comfy office chair, but have you remembered the most important thing?
You need insurance! Leaving yourself uncovered is one of the worst mistakes you can make as you start your new business. Uncovered businesses are open to devastating losses from lawsuits, catastrophic events, and even common theft and vandalism. Preparing a good package of coverage is a sound financial decision that will help you have one less thing to lose sleep over.
Five Types of Insurance a New Business Needs
- General Liability Insurance: This policy covers your business from most liability other than automobile and errors and omissions liabilities. For instance, if someone slips and falls in your place of business, their injuries would be covered under this policy.
- Errors and Omissions: This is a type of professional liability insurance, and covers you against claims made of negligence or inadequate work. As an example, say that you are a contractor and built a sea wall for a property, and in the course of a super storm that sea wall was breached. Despite your best efforts, you are sued for negligence. This insurance makes sure you are covered.
- Workers’ Compensation: This is a policy that covers your employees in case of an employment originated illness, disability, or injury. It only compensates those who are provably injured on the job. It can even cover sole proprietors.
- Business Property Insurance: This is essentially a renter’s or homeowner’s policy for businesses. It works the same way, covering the contents of the business such as stock, equipment, and other items. This policy is also called Property, Plant, and Equipment – or PP&E – that covers assets vital to your business. For instance, a brewery would cover its offices and fermentation tanks, and a trucking company it’s garage equipment
- Business Interruption Insurance: Everyone forgets this one, but it’s among the most important policies you can have. This insurance replaces business income lost when a covered event such as a fire or natural disaster causes you to be unable to conduct business.
This list is by no means exhaustive. Depending on the business you’re in, you may want to look at different policies such as All Risk or Workers’ Compensation Catastrophic Cover. At E & L, our independent agents can help you to navigate to an insurance package that will protect your vulnerable business in its early years, and help you to grow. Not all businesses have the same risk, but figuring out an affordable package of insurance coverage can minimize the worries of starting up.