Doing business is risky for some reasons. All sensible entrepreneurs, therefore, have some form of insurance for the company. Insurance should be looked at as important as any other asset the company owns. Just having “insurance” may not be sufficient to meet the demands of the modern marketplace. Here is a list of the essential insurance products all businesses must have:
1. Comprehensive General Liability Insurance
This is a rather common form of business insurance but is essential for protecting the company’s assets in some situations. CGL insurance protects the business against property damage, personal property claims, injury during advertising, and third-party related bodily injury. Most business accidents occur in one of these areas. CGL is considered particularly useful because the insurance company also pays the legal fees if a claim is taken to court.
2. Workers’ Compensation Insurance
This is not an optional insurance policy like mover’s insurance, but a must have for all businesses. Worker’s compensations is a legal requirement that businesses owe employees in addition to the standard wage. If a worker gets injured or harmed in any manner carrying out any work-related task, the business must compensate the worker. While most of these accidents are minor, the average worker compensation falls around $63,000. That’s a hefty amount that a company will need to have covered by a solid insurance policy.
3. Product Liability Insurance
If your business sells any physical product, then this policy is a must have. Product liability insurance protects companies against claims caused by defects in products. Product defects could sometimes cause bodily harm to consumers, in which case compensation and legal fees can be hefty. Because manufacturing defects are rather common, almost all businesses are required to have this coverage.
4. Key Man Insurance
A Key Man policy is a life insurance policy. None of us can predict what could happen to us in the future, so life insurance coverage is a must have for breadwinners with families. It’s also important to have if you also own a company. A key man policy would make a payout to both family and company in case of an untimely death.
5. Directors and Officers Insurance
This insurance coverage protects the company from legal liabilities brought forth by actions of directors or executive officers. If a director or an officer’s action results in legal proceedings, the company could be in for a costly lawsuit. Additionally, if the director or the officer has to be put on leave as a result, it also costs the company workforce. This insurance policy protects against both situations.
6. Business Income Insurance
This insurance coverage will provide funding for your company in case income estimates fall short of expectations. If a bad quarter leaves your business struggling to pay employees, business income coverage will step in and help.
7. Cyber or Media Insurance
If you have been reading the news lately, then you would know how vulnerable all businesses are to cyber attacks. Cyber insurance policies can help businesses recover from potentially devastating cyber attacks. This type of policy offers coverage for both indemnity and defense.
If you own a company, make sure all of the above insurance policies are in place before it’s too late