What is the importance of business insurance? Should you get one? Know more about business insurance and its benefits.
Risks are inherent to a business. It is an inevitable part of running either a small business or a well-established company. These risks come in various forms. It could be a natural catastrophe that destroyed business properties, an effect of a national economic crisis, a legal dispute, or simply an employee injured while performing duties. When a business has no safety net, these risks may cause bankruptcy.
It is paramount to protect the business assets. Adding security to business properties ensures the company’s survival regardless of the problem presented. And the best possible way to protect business assets is through insurance.
About Business Insurance
All businesses, regardless of the size, type, and nature, need insurance. Before starting a business, it is one of the things a business owner must possess, for these insurance packages are the security of the business when problems strike.
Business insurance coverage serves as the protection of businesses from losses they may experience due to circumstances. These insurances come in different types, varying from coverage of property damage, employee-related risks, and legal liability.
Categories of Business Insurance
Here are the different types of business insurance small business owners might consider.
#1 Property Insurance
Property insurance covers the physical assets of the business. These include equipment, inventory, furniture, machinery, signages, and similar objects destroyed by storms, fire, and theft. However, property insurances coverage doesn’t include natural disasters with large-scale effects such as floods and earthquakes. Mass-destruction events have a separate insurance policy. Businesses in areas vulnerable to natural disasters should apply for the latter insurance as well.
This type of insurance allows you to reimburse the cost of the damage. The replacement cost is used to replace or fix the damaged pieces of equipment.
#2 Home-Based Business
Nowadays, home-based business is more prevalent since it is more convenient and requires less capital. Unfortunately, homeowner policies do not cover home-based businesses. For this type of business, you have to apply for another type of insurance, besides the homeowner’s policy. Applying for business insurance provides additional protection for your equipment and stocks.
#3 Vehicle Insurance
Every business should procure vehicle insurance, especially when the business relies on using automobiles. The vehicle insurance covers the vehicle in an accident, the injured employee, and the third-party injury.
#4 Continuation Policies
A business interruption or continuation policy is insurance best suited for businesses that have a physical location. These businesses include retail stores, restaurants, and manufacturing facilities, to name a few. The purpose of this insurance is to compensate for the business’ loss during events that disrupt the normal course of the business.
#5 Business Owner Policy
BOP or business owner policy is all-in-one insurance for small businesses. It covers all major property and liability risks. Inasmuch, this policy is offered to businesses as a package. This type of insurance is more convenient for small business owners rather than applying for different insurance coverage.
These are fundamental insurances a small business must obtain. There are a few more policies available designed for specific circumstances. If you need to learn more about how to find a reliable insurance policy provider, you may ask for help from reliable sources and professionals.