3 Types of Insurance You Need For Your Business

Think about getting insurance before you even start developing a business. Most business owners are required by law to have minimum liability coverage. Look for additional policies to cover your property and possessions. Review three common types of business insurance that you need to be prepared as a business owner.

Professional Liability

Professional liability insurance is designed to protect professionals against claims of negligence. This negligence may include misinformation, misdiagnoses or botched treatments. Individuals and businesses are financially covered for any damages that arise in civil or criminal lawsuits. This coverage includes a defense team, even if the defendant does not win.

General liability insurance covers negligence in general, such as slips and falls or defective products. Professional liability covers the damages that are caused by an individual. There are different forms of coverage, such as medical malpractice insurance to protect doctors and attorney malpractice insurance for lawyers. Whether it’s medical malpractice or a slip-and-fall accident, people are within their rights to file a personal injury claim if they can prove negligence.

Property Insurance

Part of running a business is insuring your building and all of its contents. Property insurance covers your business property for damages from a fire in addition to theft, vandalism or a computer breakdown. The two main types of coverage are replacement cost or actual cash value. The replacement cost covers the major repairs or installations of damaged property. The replacement is usually brand new and does not include depreciation costs.

Actual cash value is the cost of a property repair or replacement that includes depreciation. Depreciation is calculated based on standard wear and tear. In some cases, appreciation occurs when the property value increases.

Workers’ Compensation

Workers’ compensation insurance protects employers from lawsuits brought on by employees. Their compensated funds include medical bills, lost wages, and legal fees. These funds are guaranteed to prevent employees from filing civil or criminal lawsuits. They receive long-term claims from the insurance company instead.

Workers’ compensation is required in some states, and the provisions vary in different regions. Many plans cover the living expenses of dependents whose family members were killed. Standard coverage does not include the costs of emotional distress or punitive damages.

Insurance is affordable for most business people and not worth the risk of avoiding. At the least, they need liability insurance to prevent lawsuits from causing social and financial ruin. Then, there is property insurance to cover the repair and replacement costs. Workers’ compensation insurance is available to employees and employers who also want to avoid lawsuits. In addition to these three types, look for plenty of other business insurance plans that are recommended.

For more business advice, especially about updating your business plan to include the insurances you deem necessary for your business, check out this fantastic site to get your questions answered. 

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