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When Do You Really Need Insurance for Your Business?
As an entrepreneur, you know not every part of the job is glamorous.
Buying insurance can feel like a hassle, but investing in the right policies now can save you from legal headaches and unexpected costs down the road. You probably have questions about what specific risks different types of coverage protect against and whether they apply to your business.
When insuring your business, factors like location, industry, and the number of employees can affect applicable coverages. To ensure your new business is fully protected, here’s a list of common business insurance policies that may apply and how they work.
Commercial property insurance
If your business has a physical storefront or offices, especially with valuable equipment, consider commercial property insurance. It protects the property your business uses.
Commercial property insurance covers incidents like theft, vandalism, fire, and weather-related damages. It also protects supplies and equipment (computers, printers, etc.) used for work.
However, this policy usually won’t cover damages due to earthquakes or flooding. If you operate in areas prone to these incidents, look into supplementary coverage.
General liability insurance
Consider general liability insurance as a new business owner.
This policy protects against third-party property damage and injury claims. For example, if a client visits your office and gets injured or has their property damaged, you could be held liable. Your policy helps cover these situations and prevents unexpected lawsuits.
General liability insurance applies to a wide variety of businesses. If you have in-person interactions with clients, customers, or partners, it’s a smart policy to have.
The policy also applies if you visit a client’s site. Depending on your industry, customers may require proof of general liability coverage before signing a contract.
To simplify and reduce costs, you can purchase a Business Owner’s Policy (BOP) that includes both property and general liability coverage.
Cyber liability insurance
Many small business owners underestimate the need for cyber insurance, but the risk of data breaches is significant.
A simple employee mistake like clicking on a phishing email can expose confidential information. According to First Data, 90 percent of data breaches impact small businesses.
If your business stores customer or employee data electronically, consider cyber liability insurance.
A data breach can be extremely costly due to business interruption and regulatory requirements. Without insurance, the expenses for legal defense and notifying affected parties can add up quickly.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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