What Kind of Protection Does Insurance Give My New Business?
Small business owners face a certain degree of risk when running their companies. These risks include employee injuries, damage from natural disasters, and lawsuits from customers. Business owners should take action to protect both their business and personal assets.
General Liability insurance is necessary to protect against claims of injury, the need for medical care, and property damages lodged against your company. Also, this insurance protects you from liability over malfunctioning products. According to attorney Craig Swapp, “There’s an unspoken agreement between product manufacturers and consumers: If a product is for sale, it’s safe to use. Of course, that’s not always the case, and you can hold manufacturers accountable if they injured you by producing a defective product of any kind.” Defending yourself against a lawsuit can be expensive. A good general liability insurance policy ensures that these expenses are not paid out of pocket. A business with a professional liability insurance policy is also attractive to potential customers. It is a sign of professionalism and provides customers with the needed assurance to tip the scales in your favor. It is important to remember that general liability insurance does not cover the property of the business owner in most cases.
Business Interruption Insurance
Business interruption insurance will help cover lost income that occurs as a result of a covered event. These events will usually include damage caused by fire, wind, theft, and falling objects. It is important to read a business interruption insurance policy closely to understand what events are covered by the policy. This insurance also covers other expenses like the cost incurred by a move from a damaged location. It is also important to note that expenses exceeding the coverage of the policy are the responsibility of the business owner. For this reason, careful consideration should be given to coverage limits when selecting a policy.
Cyber Security Insurance
Cyber Liability Insurance protects businesses from the devastating effects of cyber attacks and data breaches. When a network is attacked by cybercriminals, the company that is attacked can be held responsible for any sensitive data that is compromised. The attorneys at Steptoe add, “Government investigations often require businesses in the technology, communications, e-commerce, Internet service, and financial industries to provide information about their customers and subscribers, thereby forcing them to navigate sometimes conflicting legal obligations arising out of multiple privacy and security laws worldwide.” A good cyber liability insurance policy will help the businesses weather the damage of cybersecurity breaches. These policies will cover the cost to notify customers, monitor customer credit, mount a legal defense, and pay any fines resulting from the breach.
Commercial Property Insurance
Commercial property insurance will offset the cost of damages to a business property. This coverage is available whether the building is rented, owned, or leased. Commercial property insurance will cover costs to repair or replace a building, machinery, equipment, and any installed features. Any equipment present in the building that is owned by other individuals is covered by the policy if the business is held liable for the equipment. For the most part, employee theft and crime from outside sources are not covered by these policies. However, this extra protection can be purchased for an additional fee.
Workers’ Compensation Insurance
Workers’ Compensation Insurance is required by law for most small businesses in America. The insurance covers expenses and loss of wages for employees who are injured while working for your company. Attorney Robert J. DeBry explains, “After a work-related injury or illness, some injured workers rely on workers’ compensation to cover for their needs while they are unable. These needs can include covering the cost of medical bills, lost wages, and rehabilitation expenses.” The amount of coverage to employees can vary from state to state, so it is important that both workers and employers take the time to understand what a particular policy offers. Workers’ compensation insurance also prevents employers from being held liable for injuries sustained by employees.
There will always be some degree of risk exposure to small business owners. However, these risks can be mitigated by a little planning. One way to protect your business is by purchasing the appropriate insurance. A variety of insurance options are available to new business owners, and each of these options should be carefully considered.
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