One of the last things that a budding entrepreneur wants to deal with is insurance. However, should a catastrophe happen and you are unprotected, you’ll certainly be kicking yourself for it later down the road.
In this article, we’ll discuss the top five types of liability insurance that you must have.
1. Professional Liability Insurance
First up, we have professional liability insurance. This type of insurance protects you against all claims that say that your employee or company failed to perform to expectations.
You can’t control everything that your employees do, but they still represent your company. Thus, when a worker fails to do his job correctly and provides bad service, customers can sue. This is especially true if your employee’s poor service caused harm to the customer’s business, resulting in financial damages. Without professional liability insurance, you may be on the hook for that.
2. Workers’ Compensation Insurance
Workers’ compensation insurance helps you out if anything ever happens at work that results in an injury to one of your employees. For instance, let’s say you operate a warehouse. An old forklift malfunctions and drops a pallet on an employee’s toe, breaking it. The employee can file for workers’ compensation, which will not only pay the medical bill but also pay the employee wages for the duration that he has to miss work.
If you don’t have workers’ compensation insurance, this could come out of your own pocket. If you have the insurance, you are also more likely to attract better talent to your workforce.
3. Product Liability Insurance
Product liability insurance is very similar to professional liability insurance, except that it is constrained to the situation where a product fails to perform to expectations. If you operate a business that sells a product, and not a service, you need product liability insurance. Talk to Octave assurances to figure out which plan you need.
4. Business Interruption Insurance
Business interruption insurance will protect your business in the event of a catastrophe by providing you with income that you would have lost during the point that the business is inoperational.
Continuing the previous example, let’s say you’re the owner of a small warehouse. Your area floods, and because of that, the roads are closed around you. You can no longer make deliveries, so your business has been interrupted. The right business interruption insurance program will pay your company lost revenues during this time period. Though expensive, this type of insurance can be well worth it if you do ever experience such a catastrophe.
5. Auto Insurance
Last but not least, your company must have auto insurance if it owns or leases any vehicles. Not only is this mandated by law, but it’s also a good practice. Any warehouse, for instance, requires vehicles to make deliveries. Vehicles are one of the highest fixed costs that kind of business has. To ensure that you don’t have to pay out of pocket if an accident ever happens, you need auto insurance.
Types of Liability Insurance Made Simple
Now that you know what the different types of liability insurance out there are, all that remains is for you to go out and pick up the ones that your company needs!
For more small business advice, be sure to check out the rest of the articles on the website!
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