According to research, as much as 52% of all civil lawsuits target small businesses every single year. This means that if you have a small business without the right business insurance, you are at high risk for a lawsuit.
Running a business from the start is already overwhelming, as you have to account for finances, overhead, startup fees, and other surprising costs. Slap a lawsuit on top of those costs and you are destined to go bankrupt if you do not protect your business.
The problem is when looking for business insurance, how do you know what to look for so that you can properly protect your business? There is nothing worse than missing the fine print and end up losing a bunch of money.
Thankfully, we’ve created this article to teach you everything you need to know about finding the right business life insurance for your company. Keep on reading to learn more.
Why Get Business Insurance?
You are probably already aware that you could lose a lot of money in claims and lawsuits, but did you know you can also lose money even if you’re business is not guilty? The costs of legal fees are enough to put any small business into bankruptcy.
Business insurance can protect you if a customer slips or falls in your place of work, if an employee gets injured on the job, or if there has been an act of malpractice on your business’s behalf.
Know the Different Types of Business Insurance
There are a few major types of business insurance, and each one really depends on what type of business you have, and what type of protection you need the most. Knowing these different types of business insurance, such as nonprofit insurance, will help you understand which type you should invest in, depending on the type of business you run.
The three major types of business insurance are:
Professional Liability
Customers can sue you for a myriad of reasons that can go beyond personal injury. This includes performing an action that you shouldn’t have done or forgetting to perform an action that you should have done.
If you are a lawyer, doctor, accountant, or other client-related business, this is an essential type of insurance you need to protect yourself. This also includes if you use a vehicle for your business’s use, as personal car insurance does not cover the use for business.
The most common lawsuits that professional liability insurance covers are medical malpractice. Americans file over 17,000 medical malpractice lawsuits every single year, with some medical professionals being targeted more than others.
General Liability
General liability insurance covers your business in the case that someone has an injury at your workplace, if property damage occurs, or if there has been damage to any equipment on your property that you are renting.
This insurance will cover medical bills, the costs to repair or replace any damage, and the legal fees to protect yourself. Depending on the severity of the case, your business may not be able to handle a lawsuit, which will throw you into bankruptcy. Having this insurance will defend and protect you and your business from any risks of legal charges.
Business Owners Policy (BOP)
The business owner’s policy insurance is a bundle of multiple types of insurance in one package, including business interruption, general liability, property damage, and items owned by a third-party supplier.
When applying for the business owner’s policy, your business must meet the specific eligibility requirements to be accepted. This involves filling out a risk assessment form that entails where your business is located, the clientele you work with, and other details.
This is because some locations are at a higher risk than others for flooding, vandalism, mechanical breakdown, the danger of work, etc.
Know Your Risks
Depending on your type of business, you have different risks that may require specific coverage. Some of the examples of these risks include:
- Owning a restaurant and someone gets food poisoning or spills hot coffee on themselves
- Someone slips and falls at your establishment
- Medical malpractice lawsuit
- An employee sues you for a variety of reasons
- Being an accountant and someone sues you for making a mistake on their tax return
Take some time to do your research and discover which risks lay within your business so that you can invest in the right type of insurance to protect yourself.
Read Between the Lines
Perhaps the biggest mistake business owners make is they blindly purchase insurance without reading between the lines to ensure it is the right fit.
Many insurance providers give the bare bones when it comes to insurance, which means they have many exclusions that are only located in the small print. Make sure you check between the lines and ask questions about what is included, excluded, the premium costs, deductible costs, and limits.
Choose a Provider That Knows Your Business
Some insurance providers choose to work with specific types of businesses that align with their insurance. For example, one provider may strictly work with restaurants, as they have catered their insurance to cover every risk that a restaurant may have.
Depending on your type of business, you may want to investigate and find an insurance provider that knows your niche inside and out, so that you are fully prepared in the case of a legal issue. Check out LoPriore Insurance Agency to learn more about the right insurance for your business.
Learn More About Business Insurance
Now that you know about the different types of business insurance and what risks are involved, it is time to get shopping for your coverage.
Before you seal the deal, check with the provider on the amount of deductible, fees, and policy limits to ensure you have a good deal.
If you found this article helpful, check out more like this under the business section of our blog.
