Insurance is important for almost every business, but the sheer number of insurance types available—and the costs associated with them—can be intimidating, especially for new entrepreneurs. All types of insurance are meant to mitigate risks associated with your business, protecting it from legal action and, in some cases, physically […]

Insurance is important for almost every business, but the sheer number of insurance types available—and the costs associated with them—can be intimidating, especially for new entrepreneurs. All types of insurance are meant to mitigate risks associated with your business, protecting it from legal action and, in some cases, physically destructive events. Accordingly, the best way to choose and modify your insurance policies is to acquire a better understanding of the specific risks your business faces.

So how can you evaluate your business’s risks?

Types of business insurance to consider

Let’s start by explaining some of the main types of business insurance you might purchase for your enterprise:

  • General liability insurance. General liability insurance is intended to provide blanket protection for a business, from things like property damage or personal damage. It can protect you from most lawsuits that would come to your business.
  • Product liability insurance. If you manufacture or sell a specific product, product liability insurance can protect you from things like defects or design flaws that lead to personal harm.
  • Property insurance. Property insurance can protect you from things like theft, vandalism, and some types of natural disasters as well as major repairs that may need to be done in the future.
  • Workers’ compensation insurance. Workers’ compensation insurance protects your employees should one of them be injured on the job. For the most part, this is a legally required type of insurance and requirements vary by state.
  • Business interruption insurance. Business interruption insurance will give you a payout if your business is unable to continue operations for a period of time.
  • Vehicle insurance. If your company owns vehicles, you’ll need policies to protect those vehicles, just like you would a personal vehicle.
  • Other types of insurance. There are several other types of insurance your business could need, including protection from specific natural disasters, and key person insurance to keep your business running after unexpectedly losing a key employee.

 

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