Essential Coverage
Most small businesses need to purchase at least the following four types of insurance.
Small Business Insurance Basics
No matter what the size is of your business you will need some level of insurance to protect you and your business. For small businesses, insurers often combine a number of insurance policies into a package sold as a single contract.
Consider small business services if you’re looking for
- Coverage for the loss of key executives
- Succession planning
- Incentives for valued employees
- Protection for the business you’ve built
1
Property Insurance
Property insurance compensates a business if the property used in the business is lost or damaged due to such things
2
Business Auto
A business vehicle policy covers cars owned by a business. The insurance pays any costs to third parties for bodily
3
Liability Insurance
Any business can be sued. Customers may claim the business caused them harm due to a defective part
4
Worker Compensation
Workers Comp insurance, as this coverage is usually called, pays for medical care and replaces a portion of lost wages
Essential Coverage
Errors and Omissions Insurance/Professional Liability
Some businesses involve services such as consulting, design functions or representing the needs of others, which can lead to being sued by customers or clients, claiming that the business’s failure to perform a job properly has injured them or caused some sort of harm.
Errors and omissions or professional liability insurance covers these situations. The policy pays the judgment for which the insured is legally liable, up to the policy limit. It also provides legal defense costs, even when there has been no wrongdoing.
Employment Practices Liability Insurance
Employment practices liability insurance covers (up to the policy limits) damages for which an employer is legally liable such as violating an employee’s civil or other legal rights.
In addition to paying a judgment for which the insured is liable, it also provides legal defense costs, which can be substantial even when there has been no wrongdoing.
Key Employee Insurance
When certain key employees die or become disabled, income insurance can compensate the business. This coverage cushions some of the adverse financial consequences that results from losing a key employee.
Umbrella Policies
As the name implies, an umbrella liability policy provides coverage beyond the business’s other liability insurance policies. It is designed to protect against unusually high losses and provides protection when the policy limits of one of the underlying policies have been used to the limit.
For a typical business, the umbrella policy protects beyond the general liability and auto liability policies. Additionally, if a company has employment practices liability insurance or other types of liability insurance, the umbrella could provide protection beyond the limits of these policies.