10 Types Of Insurance For New Home Businesses
Let’s be honest here…
No one is more qualified than a proper insurance agent to provide details and advice on what types of insurance policies you need for your business. Sometimes after speaking to one, you might even find things that you were not aware of, but absolutely essential for protecting your business.
Starting a home business does not mean that you are exempted from the potential liabilities of running a conventional business.
And just because you are operating a business from a sofa seat and coffee table in the living room, it doesn’t mean that you will be given leeway should an incident or dispute occur. Saying “How would I know” is not good enough.
If you are still living with that mindset that being obnoxious is a legitimate reason for negligence, you are not ready to run your own business… whether it’s from home or the office.
Taking into account how trigger-happy people are these days with suing companies, insurance is essential for any business. Even structuring your company as a corporation is a form of insurance itself as it limits your liability.
Here are some of the most common types of insurance to consider for your business.
This is the most basic coverage that anyone should be most familiar with. Health insurance protects you from expenses like dental, medical, and vision. Not only is it supposed to protect you, it protects your staff against catastrophic loss from illness and injury.
A good friend of mine was woken up by a sudden phone call in the middle of the night. His warehouse was burning to the ground. All his inventory and equipment were turned into ash overnight.
He was visibly upset when we met up the next day. The silver lining was that he had fire insurance. And the claim would amount to $300,000 give or take.
Can you imagine if it was your warehouse storing $300,000 worth of property… and didn’t have insurance?
This is absolutely necessary if you are in a business that stores inventory. You never know what can happen in a warehouse when there are no employees around. Short circuits, accidents, or even a cigarette butt from a passer-by can cost you dearly.
Better be safe than sorry.
3) Extended coverage
You will need this in case you lose your stuff for conditions other than by fire.
Don’t ask me why insurers prefer to split fire with “the rest”. I think you know the greedy answer too.
An extended coverage will basically cover you for things like smoke, explosions, and certain natural disasters. Flood is a tricky item. You need to find out the details from an insurance agent in your state.
When someone gets injured for using your products or getting injured at your premises, you could be looking at a possible lawsuit. That’s just the way it is these days. It’s called consumer capitalism.
Liability insurance won’t be able to void a lawsuit. What it can do is pay for damages which you could be subjected to when the case closes.
In many cases all around the world, 1 bad incident alone can bankrupt a company. So be careful with how you manage your business premises.
5) Product liability
This is exactly what it sounds like. Such policies cover liability you incur for products that are manufactured or sold.
6) Professional liability
If you are an architect and the building you design collapse like a house of cards, you probably don’t need to guess what is coming up next.
As a professional, clients pay you for expertise and trust. A failure to perform your duty can make you liable for damages caused by your professional errors and omissions.
Professional liability insurance is supposed to protect you from such damage claims.
But please… don’t let this make you take mistakes lightly.
7) Vandalism and mischief
The world does not revolve around you. And you can never predict what are the motivations of people to do things.
By a stroke of good or bad luck, you could encounter vandals one day that treat your property like a game prop. It’s not something you might expect. But these things happen spontaneously and are certainly unpredictable.
The likelihood that you might run into these situations increase if you operate in areas that are buzzing with night life.
This obviously covers you for losses incurred from robbery and burglary.
In most places, it is probably compulsory to get auto insurance for your cars. If not, it is definitely something that you should look into.
The cost of vehicle repairs can be very costly indeed.
If your business requires traveling a lot in your car, you would probably agree that the more time you spend behind the steering wheel, the more likely you will run into an accident.
The last thing you want to hear after walking away from a traumatic accident is that you need to pay $5,000 for repairs. Let the insurers take on that risk for you.
Don’t forget to be smart in sourcing for cheaper policies. First time buyers often don’t realize that they can clock in significant savings from simple research and comparison.
10) Worker’s compensation
If an employee suffers a permanent disability on the job, it is only right that the company takes care of him. You would want that for yourself if you are the employee.
Even worst, if there is death on the job, the employee’s family could lose their main source of household income.
Since you are the business owner, you can’t seriously claim that you are 100% in the clear.
Worker’s compensation will provide the benefits for your staff should such undesirable events happen on your watch.