In the course of running an enterprise, there will likely be times you'll need some form of business insurance. Whether to comply with regulations or to protect your interests against possible mishaps, insurance is a fact of life. Knowing what forms of business insurance you should carry is important, so let's take a look at four of the most common types of insurance that companies choose.
Running your own business means that you take on some degree of liability for when things go wrong. In professions where the damage you can do is out of proportion with your profit margin, it's particularly wise to be insured. For example, a plumber might be paid a few hundred dollars for doing a job well, but they may incur tens or even hundreds of thousands of dollars in liability if they mess things up. Paying for damage to items like hardwood floors, antiques, and expensive furniture isn't something you want to do out of pocket.
State-by-state rules will vary, but if you have a specific number of employees, you will be required to carry workers' compensation insurance. Workers' comp covers things like injuries incurred while doing the job or work-related activities, such as errands. It also covers injuries that might happen at required company-related events, such as picnics and seminars. In the absence of workers' compensation insurance, you may end up either being sued for a personal injury claim or forced to pay a comp claim and additional penalties for not paying into the system.
Commercial Property and Auto Insurance
Just as you may insure your house or your personal vehicle, you'll likely want to be insured against losses to business items. In addition to your place of business, you can insure your company's equipment and vehicles. Likewise, your insurance policy should be designed to cover injuries that operators or passengers might suffer. There should also be some form of third-party liability coverage in case an accident occurs involving someone not otherwise covered by other types of insurance your company has.
Key Person Insurance
When operating a business, especially a small one, some folks at the company are critical to its operations. Key persons can be insured, allowing a company to weather the loss of a particularly skilled employee, critical executive, or founder. This is a type of life insurance policy that names the company as the beneficiary in the event of the individual being disabled or killed.
Contact an insurance provider like Welsh Insurance Agency Inc. for more information about business insurance.