Running a business comes with its risks, which can cause significant financial losses. Unfortunately, business owners cannot predict the future and cannot prevent unexpected events from happening. However, they can protect their businesses from financial losses through insurance policies. Insurance policies provide a safety net for businesses to recover from unexpected risks. Here are four types of insurance that every business should consider carrying.
Property insurance covers damages to a business’s physical property caused by covered risks such as fire, theft, and natural disasters. Property insurance provides coverage for the building, inventory, equipment, and furniture. It is essential for businesses that own or lease a physical location.
Property insurance policies provide coverage for the following:
- Fire damage
- Water damage
- Natural disasters
- Business interruption
Business owners should consider getting additional coverage for risks such as earthquakes, floods, and hurricanes, which may not be covered under standard property insurance policies.
Liability insurance protects businesses from financial losses resulting from lawsuits brought against them by customers, employees, or other third parties. Liability insurance covers legal fees and damages that a business may be required to pay if found liable for damages.
There are different types of liability insurance, including:
- General liability insurance
- Professional liability insurance
- Product liability insurance
- Umbrella liability insurance
Liability insurance policies provide coverage for the following:
- Legal fees
- Medical expenses
- Property damage
- Personal injury
- Advertising injury
Businesses should consider carrying liability insurance to protect themselves from potential lawsuits and financial losses.
Workers’ Compensation Insurance
Workers’ compensation insurance is mandatory in most states for businesses with employees. Workers’ compensation insurance provides coverage for medical expenses, lost wages, and rehabilitation costs for employees who are injured on the job.
Workers’ compensation insurance policies provide coverage for the following:
- Medical expenses
- Lost wages
- Rehabilitation costs
Businesses should carry workers’ compensation insurance to protect their employees and comply with state laws.
Cyber Liability Insurance
Cyber liability insurance provides coverage for businesses that handle sensitive customer information such as credit card numbers, social security numbers, and personal information. Cyber liability insurance protects businesses from financial losses resulting from cyber attacks, data breaches, or other cyber-related incidents.
Cyber liability insurance policies provide coverage for the following:
- Legal fees
- Notification costs
- Credit monitoring costs
- Data recovery costs
- Loss of income
Cyber liability insurance is becoming increasingly important as cyber attacks become more common. Businesses that handle sensitive customer information should consider carrying cyber liability insurance.
In conclusion, insurance policies provide a safety net for businesses to protect themselves from financial losses resulting from unexpected risks. Businesses should consider carrying property insurance, liability insurance, workers’ compensation insurance, and cyber liability insurance to protect themselves and comply with state laws.