Starting, operating, and maintaining a small business requires a substantial investment. You have money invested in capital equipment, inventory, real estate, automobiles – and don’t forget your employees. Not only do all your physical assets deserve to be insured against loss, but your own personal and business value needs to be protected from lawsuits. In addition, on top of protecting your business, there are types of business insurance you are required to have by law.
However, what are the different types of insurance you may need? Here is a look at the types of insurance you should have for your small business:
General Liability – Whether you operate a manufacturing facility or provide consulting services with little or no capital investment, your company is at risk of huge financial loss if a client, customer, or other victim of negligence decides to sue. General liability insurance will protect your cash resources and help pay legal judgments against your company, usually up to $1 to $2 million dollars.
Product Liability – Do you manufacture or assemble a product? Anything you produce that is sold to the public may have a risk of safety if it causes bodily harm due to negligence, faulty materials or manufacturing. Product liability acts much like general liability, but protects your business from lawsuits resulting in harm from the product(s) you sell.
Errors and Omissions – E&O insurance is also called Professional Liability insurance. This type of insurance is a must for those who offer professional services, such as attorneys, real estate agents, financial consultants, etc. Any type of malpractice, negligence, or simple forgetfulness that causes a financial loss to clients could result in a lawsuit against you. Errors and Omissions will see that you maintain a proper transfer of risk if your client suffers from your professional service.
Business Automobile – If your company owns one or more vehicles for business or transportation services, your state will likely require auto insurance. As well, a business auto insurance policy will protect you much like a private auto policy, but add greater protection against loss due to transport and other liability.
Read about more business insurance types in Part 2 of this article [create link to Part 2 here]