With more the 30% of new businesses in the US ending in failure within their first 3 years of operating, new businesses must do everything in their power to stay afloat.
One of the best defenses a new business can use to protect itself is insurance. There are all sorts of different types of business insurance available which can help with virtually any scenario which may damage your company.
If you are looking to get insurance but aren’t sure which one is best for you, here is a list of the most helpful types of business insurance to consider for your new business.
1. General Liability Insurance
Regardless of the type of business that you operate, there is always a risk of unexpected misfortune befalling a customer. Whether this is a slip on your premises or some other claim, your general liability insurance will protect you from legal claims made against your business.
Because it protects you from miscellaneous claims against your business, a general liability insurance policy should be the bare minimum that you include to protect your business in the short term.
2. Commercial Property Insurance
As the name suggests, commercial property insurance protects against any damage that could occur to your property.
A comprehensive commercial property insurance policy will restore all of the furniture, equipment, and other specified property to its original condition in the event of an accident.
Depending on the scale of your operation, this could be expanded to protect your warehouse, in the event of fire or water damage.
3. Professional Liability Insurance
If your company’s business centers around providing professional advice or services to other businesses, then professional liability insurance is a must-have product.
No one can get it right 100% of the time. You don’t want to cover the costs of expensive legal action if the advice you provided leads to problems for a customer.
Professional liability insurance will protect you from this ever happening.
Sometimes, you’ll need something a bit more tailored, however. This is where a captive insurance company can come in to fill the gaps in your coverage to ensure you are totally protected.
4. Key Person Insurance
In the event that a major founding member moving on from the business, due to illness or otherwise, key person insurance will keep the show on the road.
Although it would be hard for any business to cope with the loss of a key decision-maker, the lump sum provided by key person insurance may help your business to promptly move on.
5. Compulsory Insurance Policies
Whereas most insurance policies are optional, there are some which you are required to have by law.
The most important of these is workers compensation insurance. This is designed to protect your employees in the unfortunate event that they are injured on the job.
If they are hurt and unable to work for a period of time, the workers’ compensation will ensure that medical costs are taken care of. It will also mean that a percentage of their monthly wage is provided.
Certain states will also require you to take out a disability insurance policy. This is mainly the same as regular workers compensation insurance, except that it is not necessarily work-related.
It is required in five states. New York, New Jersey, Hawaii, California, and Rhode Island.
Different Types of Business Insurance Can Protect You
Any business owner will tell you that you must expect the unexpected when it comes to operating a company. There are all sorts of potential traps waiting for you just around the corner.
This is why there are so many different types of business insurance available. Each serves a different purpose, so make sure that you study them closely before making any decisions.
Let us know below which insurance policies you’ve used in the past, and how they’ve helped your business stay afloat.