Whether your small business is in its infancy or it has been existence for years, the scary reality is you are one lawsuit or incident away from going bankrupt and shutting your doors for good. This is especially true if you do not have the right types of insurance to deal with threats that could affect your ability to operate and make a living.
The good news is: there are insurance policies available for all of your needs. Below are 5 types of insurance that you as a small business owner definitely should consider.
1. Liability insurance
While you and your company do your best to provide acceptable goods or services to your clientele, accidents do happen and if they are large enough to warrant legal action you want to make sure you are covered.
To make sure that your business has sufficient protection from being sued you should have four different liability insurance policies depending in the type of industry you are in and what your business offers.
- Cyber liability will protect your company in the event of an electronic security or data breach which are very common in this age of technology. This can happen to even the smallest business as all customer records including credit card information is typically stored in electronic databases.
- Product liability will cover your company in the event your product is defective and causes harm to customers that use them.
- General liability covers you for injuries sustained by customers or employees on the premises.
- Finally, professional liability policies provide you with protection if you are sued by a client for errors or negligence when you or your staff are performing your services.
While all of these types of policies may not be applicable to you, if you felt that they are, having each policy will protect your company in any instance where you could be held liable for damages.
2. Property insurance
Your company has a lot of property and equipment and obviously you want coverage in the event anything is damaged beyond repair or destroyed. Property insurance protects your property inside and around your business and this includes such things as furniture, computer equipment, and inventory. Speak with an insurance broker to learn more about this type of insurance.
While you try to be vigilant and inspect the premises regularly, incidents such as fires, floods, and thefts occur and if they do you want a policy that will repair damages and replace anything that is stolen or ruined. It is beneficial for you to take inventory of everything on the premises and purchases a property insurance policy that will cover all contents in the event that you lose everything.
3. Business interruption insurance
If an incident occurs that involves your workplace or affects your ability to provide your product or service, you may experience a loss of income and this could continue for a significant period of time. This is especially devastating to companies in retail who depend on their physical location to successfully do business.
As a result, business interruption insurance is a good idea. This policy will compensate your business for lost income as the result of an incident. Depending on your policy, the insurance company could pay for additional expenses such as moving to a temporary location and renting equipment while the damage is cleaned up.
4. Worker’s compensation insurance
Even if you only have one employee, you still need worker’s compensation. You should not assume that just because your company is covered by the Workplace Safety & Insurance Board (WSIB) you do not require anything else if an employee is injured. The WSIB is no-fault insurance and does not cover all costs in an incident.
Worker’s compensation insurance covers medical needs, disability, and benefits if an employee dies in the line of work. If an employee is injured he or she could sue and recover damages from you if you are found negligent and if the employee dies, the family can file a lawsuit against you.
This type of insurance will ensure you are covered if an employee has an incident and will not mean you will need to end operations if this occurs.