The right insurance policy is essential for protecting and reducing the financial and tangible risks in business. As a business owner, it is crucial to ensure that all the risks you face are covered. Most startups make a common mistake: they fail to buy adequate insurance policies for their businesses. This is actually an easy error for them to make. The capital is tight, and the owners have so many things in mind. Most people do not think about protecting themselves from disasters that are far away. It is important to understand that without an insurance policy, everything you have worked so hard to build can collapse in a day.
Here are some of the types of insurance you will need.
Employers’ liability insurance
This is the only type of business insurance that is legally required. If you need to employ anyone, then you must get this insurance policy. Companies that don’t have this policy are given a maximum fine of $2,500 a day. The employers’ liability insurance will help your business to cover any compensation claims that are made by your employees for any damages or injuries. This will help you save a lot of money at the end of the day.
Professional indemnity insurance
When starting your business, it is crucial to consider the professional indemnity insurance. This type of insurance will protect you from any compensation claims that are made by your clients because they think you’ve made a mistake in your business. Issues such as breaching confidentiality, giving advice that made a customer lose money or infringing copyright is covered by this insurance. For companies that deal with professional services or offer advice such as consultants and graphic designers, this insurance is paramount.
Some professional regulatory bodies insist that all their members should have this insurance policy. Some of these include accountancy, financial advice, law, healthcare and architecture. The professional indemnity insurance will help you to compensate your client demands or any legal costs, saving your business a lot of money.
Public and product liability insurance
If your new business comes into contact with the public, the public liability insurance is of utmost importance. If you visit your clients’ premises, this insurance is also imperative. It is designed to compensate claims by individuals who blame damage or injury on your new business. A customer might slip and injure themselves on a wet floor in your business premises. When this happens, the public and product liability insurance policy should pay the compensation.
If the product or services you are selling causes an injury to a client, the public, and product liability insurance will protect you.
Building and contents insurance
For individuals with business premises such as shops or an office, the building and content insurance is crucial. If you are only renting the room, you will be responsible for the contents, and your landlord will cover the building. However, if you run the business from your building, it is important to insure both the property and the business.
Choosing the insurance company
Choosing the right insurance policies for your startup might be a challenge, but not as much as getting the right company. There are many insurance companies in the market today promising business owners cheap packages. However, many of these companies are dishonest, and choosing them might make you lose a lot of money.
Choosing the right insurance company will help save a lot of money. Here are some tips to help you.
- Research: Before choosing an insurance company, do some research. The internet is full of information, and you will be able to identify a good and reliable company online. If the company’s reviews are positive, then the company is ideal. Avoid companies that have no reviews.
- Referrals: Ask other business owners around your area about the insurance companies they have used. Your family and friends will also play an important role in this decision.
- Availability and communication: Choose an insurance company that will be available when you need it. Before selecting a company, ensure that it has adequate communication practices and an effective Internet presence.
Michael Rogers is the operations director of US Insurance Agents. With over five years of experience and knowledge in the insurance industry, Michael contributes his level of expertise as a leader and an agent to educate and secure coverage for thousands of clients.