What type of insurance coverage should small businesses consider?

Basics of commercial insurance coverage plans

Business InsuranceProper insurance coverage is important for companies of all sizes, but when it comes to shopping for policies, small business owners often struggle to know what they should be buying.

This is because there are several different types that should be considered and that may need to be covered. It can be vital to the financial security of a small business that it covers itself against the main risks involved in the ownership of that business. The right policy will make the difference between the safety or the loss of the assets owned by you, your family, and your company.

Just as an individual requires a number of different types of coverage, such as auto, homeowners, health, life, and other forms of insurance, so does a business require several types of protection. The following are the types of insurance that are considered to be most critical to small business ownership:

• General Liability Coverage – no matter how big or small a business may be, it needs to have coverage from liabilities. This type of protection will offer financial coverage from claims that could be filed against you in terms of negligence, injuries, and accidents, and others, depending on the policy. Your specific type of business may require other forms of liability insurance, so you should consider additional options such as both professional and product liability coverage.

Commercial Property Insurance – if you are operating out of a single facility, then if any damage occurs there, it could cause you to have to either temporarily or permanently shut down the location. Clearly, this would be a financial catastrophe for any business. Therefore, commercial property coverage is required to protect the business from water, fire, or vandalism damage, theft, and many other problems that could make the location unusable.

• Commercial Auto Coverage – this type of policy protects a company against bodily injury or physical damage that could occur as a part of an accident in which the commercial vehicle was involved.

• Workers’ Compensation: should a worker ever be injured on the job, this form of coverage provides wage replacement and health benefits to that individual while he or she is in treatment and recovery.

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