Owning your own business is part of the American dream, but not having the proper insurance coverage can turn that dream into a nightmare. Sometimes, businesses are magnets for lawsuits — slips and falls, product malfunctions, employee accidents, etc. Hre is a quick primer of what coverages you need:
Your business must carry general liability, which covers any legal damages that may result from claims of negligence, injury and property damage. Your liability insurance pays damages for which you are found liable, up to the policy limits, as well as attorneys’ fees and other legal defense expenses. It also pays the medical bills of any people injured by your business. Product liability provides protection from injuries or damages that may result from a faulty product.
It’s legally mandated for employers to carry workers’ compensation insurance covers your employees’ medical expenses and missed wages should they be injured while working. If a worker dies as a result of injuries sustained while working, the insurance provides compensation to the employee’s family.
If you use your own car for business purposes, understand that many personal auto insurance policies exclude coverage if the vehicle involved in an accident while being driven for business. You may need to purchase a business auto policy, which provides coverage for autos owned and operated by or on behalf of a business.
A common policy offered to companies of all sizes is Business Owners Policy (BOP). While not a catch-all, a BOP policy usually includes: Property insurance for buildings and contents owned by the company; Business interruption which covers the loss of income resulting from a disruption of the business operation; and Liability protection, which covers your company’s legal responsibility for the harm it may cause to others.
BOPs do NOT cover professional liability, auto insurance, worker’s compensation or health and disability insurance. You’ll need separate insurance policies to cover professional services, vehicles and your employees.
Talk with your insurance professional and find out which coverages you need to protect yourself and your livelihood. There are many different policies for many different businesses. Be sure you have the correct match.
