Business owners often wonder about when to purchase commercial insurance. Actually, a better question is, “What kinds of commercial insurance should I buy?” The timing question sort of answers itself because you should be shopping for coverage as soon as you plan to start your business. The right policy types are essential and pertain to factors like the following:
- Do you use vehicles as part of your regular activities?
- Do you employ workers?
- Is there office space that might suffer a fire, flood or any kind of damage?
- Does your company offer any kind of advice to customers for a fee?
- Is there a chance you or any owners might be sued?
- Do you want protection against identity theft?
If you answer “yes” to any of those questions, you should speak with an agent even before going into business. The overall goal of your chat should be to get all the contingencies taken care of and formally written into the contract before you begin offering services or goods to clients. Here’s a look at the various categories of risk you’ll want to ponder before you sit down and sign documents:
Detailed planning should include an in-depth look at what your assets are, whether you’ll be hiring workers, where the company will be housed, how much inventory there will be at any given time, where the inventory will be stored, whether there is a risk of storm damage to the company’s office space, where corporate vehicles will be stored and many other pertinent questions. Once you get a grip on the amount and types of insurance you’ll need, it’s time to begin comparing prices.
Fortunately, commercial insurance can be found online. From the comfort of your home, you can peruse a full range of policy types at all price points. The aim of this essential endeavor is to find a reliable carrier and a policy that offers everything you need.
If You Own the Company
General liability is the name for policies that can reimburse you for legal fees and damage awards in the event you’re sued by a third party. This is a rather broad category and includes many types of contracts, including identity theft, directors’ and officers’ liability, employment practices liability and errors & omissions.
In many states, so-called workers’ compensation policies are required by law. If one of your employees is hurt on the job, workers’ comp will usually pay for all medical expenses and any lost wages directly attributable to the accident. For sole proprietors, of course, this kind of protection is not needed.
To Protect Property
Floods, thefts and fires happen. You can do your level best to prevent theft and fire losses but other types of disasters, like floods and tornadoes, are unavoidable. You can even write personal property into the fine print so that your possessions and office equipment are covered. The main component of property protection is the structure where your work takes place. Consider vehicle coverage for any cars and trucks you use for business-related tasks.