Business Insurance 101: What You Need to Know

So you started your own business. You saw a hole in the market or came up with a brilliant new idea. You’ve got things going and maybe even started making some money. Well, before we go any further, it’s time to think about insurance for your business. After all, you took a big risk starting your own business and that means mitigating those risks as best you can.

The hard fact about coverage and business is that you need it. Everything you have for your business, from vehicles to basic liability, requires insurance. Without it, you could jeopardize everything you’ve built, expose yourself to crippling financial problems, or even break the law. But don’t worry, here are some basics about covering your business that can help you get the protection you need to succeed.

Types of Trade Assurance

The first thing you need to understand about coverage and your business is the different types that are out there. Depending on your business, you may need specific types of insurance. In general, business coverage can be divided into three broad categories: insurance for owners or partners and key employees, coverage of business income and assets, and liability insurance. Here is a breakdown of each different type.

Insurance for business owners, partners and key employees

If you are a business owner, you need specific types of coverage depending on how your business is set up. These may include, but are not limited to:

• Life Insurance – This coverage protects your family if something happens to you. If you are the sole proprietor of your business, this insurance is essential because business owners are personally liable for all business debts.

• Disability Insurance – In the event of injury or illness, disability insurance will provide you with income for a specified period.

• Partnership Insurance or Buy-Sell Coverage – If you have a partner in your business, this insurance will help you buy your partner’s shares and carry on the business in the event of your death.

• Critical Illness Insurance – If you become seriously ill, this coverage will give you a lump sum to help you get through the situation.

• Key Person Insurance – This coverage protects you in the event of the death or loss of employees most important to your business.

Insurance for business and property income

In addition to coverage that protects individuals, your business may also need the following types of insurance to protect its assets and revenue. Keep in mind that businesses running out of your home may require coverage beyond your home insurance. It’s always a good idea to contact your roofing company to discuss running a business from your home.

• Property Insurance – This coverage covers all buildings or property belonging to your business if they are damaged or destroyed by fire, earthquakes, avalanches and other similar disasters.

• Contents Insurance – If you have a property or building that stores stuff for your business, such as a warehouse or storefront, this policy covers the loss of that content. Note that even if you are renting space, you may still need contents insurance as your lease will likely make you responsible for what you put inside the rented space. Home business owners will need to contact their insurance company to discuss what should be included in their home insurance policy.

• Business Interruption Insurance – In the event of a claim, this policy will cover you for the period when your business cannot operate at full capacity.

• Auto Insurance – If your business owns vehicles, you are legally required to have coverage. If you use your personal vehicle for your business, make sure you contact your insurance company.

Liability insurance

Civil liability covers you in the event of fault or an accident for which you could be held responsible. There are three types to consider when owning a business: personal liability, product liability, and professional liability. These cover you from personal liability, a problem with your products, and lawsuits from your customers, respectively.

Starting your own business is a big risk, but that doesn’t mean you have to take unnecessary risks. If you own a business, you need the right coverage. Be sure to shop around and find the right insurance package for your business. If you have additional questions, we can help you understand your policies to ensure you have the right types of coverage from the right types of insurance companies.

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