The moment you start a business you are exposing yourself to several different types of risk. Though embarking on your new business venture is an exciting time for any entrepreneur, it’s vital to realize that one lawsuit can end a small business before it even begins. Thankfully, there is insurance coverage available for every imaginable risk your business can face. Here’s an explanation of six of the main types of business insurance:
Every small business owner needs to purchase general liability insurance to protect themselves in the event of any physical injury or property damage resulting from the business’ operations.
If your business manufactures a product this type of coverage is essential. No matter how carefully businesses monitor their business processes, it’s still possible to find defective and unsafe products. Product liability insurance will protect your business against claims of personal injury or property caused by products supplied or sold by your business.
Note: This type of coverage doesn’t cover product recalls.
Also known as errors and omissions insurance, professional liability insurance is imperative for business that provide professional services or advice to individuals or other businesses. Professional liability insurance protects against claims related to inaccurate advice, negligence, misrepresentation, and more. Examples of professionals that benefit from this type of insurance are:
- Business consultants
- Real estate agents
- Investment advisors
Workers’ compensation is required in nearly every state and covers medical expenses for employees who are injured or become ill while performing the duties of the job. It also provides compensation for the loss of income of the injured or ill employees and works to protect against lawsuits by the employees.
Commercial Property Liability:
As the name states, commercial property insurance covers damage to the land and capital equipment that is utilized by your business as a result of fire, theft, and other perils. Different insurance companies will protect against different types of perils so it’s important to speak with your agent to find out if you need to purchase any specialized forms of insurance to be adequately covered.
Commercial Auto Insurance:
Since personal auto policies are not meant for commercial purposes, businesses that utilize vehicles must purchase commercial vehicle insurance to cover the cars, vans, and trucks used for their business. Commercial vehicle insurance provides protection against property damage and liability claims resulting from using a vehicle for business purposes that would otherwise not be covered under a personal auto policy.
Having the right insurance in place can help ensure that your business will avoid major losses resulting from lawsuits. Always be sure to speak with your agent about the different forms of commercial insurance so that you are adequately protected.
Call us if you have any other questions!
600 E Baseline Rd. Ste B-3, Tempe, AZ 85283