5 Types of Insurance You May Need When Opening a Business

5 Types of Insurance You May Need When Opening a Business

by Brooke

There are many things to consider when starting a new business. One of them is making sure you have the proper insurance coverage to protect your new investment against disaster. Many types of insurance exist that you can obtain for your business.

Commercial Auto Insurance

If your business uses company vehicles then those vehicles need to be properly licensed and insured per the law. State requirements do vary so it is important to contact the relevant department to learn the kinds and amounts of coverage required for your type of vehicle and use. Do be aware that it is usually a good idea to carry more coverage than the minimum required.

Commercial Property Insurance

Commercial property insurance covers the loss of both the building where you do business as well as your equipment. This type of insurance is especially helpful to have if your business is located in an area that is more prone to certain types of natural disasters and it can save your business in the event of a fire. Commercial property insurance can help you pay for needed repairs such as metal roofing supplies and repair. Most companies would be hurt if they had to fix big roofing, plumbing, electrical issues out of pocket. Having insurance will help keep you afloat.

Errors & Omissions Insurance

Errors & omissions insurance, commonly abbreviated to E&O, is a kind of specialized liability insurance that protects businesses against lawsuits or losses due to mistakes. Not every type of business needs E&O. Industries that often do include financial advising, real estate, insurance itself, consulting and similar advice- or service-based professions.

Workers’ Compensation Insurance

Your business may be legally required to carry workers’ compensation insurance. Laws vary by state so it is important to know what your obligations are as an employer. Workers’ compensation protects you in the case of your employees sustaining injuries while on the job. Your company also needs to have set policy regarding the reporting and handling of employee injuries.

General Liability Insurance

General liability insurance is a final key form of insurance most businesses benefit from having. Common scenarios involve customers sustaining injuries while at your business. General liability covers medical and legal costs associated with accidents or negligence that may happen at your place of business.

It is not legally required that your business hold many types of insurance, although some are. Even if you are not required to carry protective coverage, however, doing so is still highly advisable. Look into the kinds of insurance you might need when opening a business to ensure adequate protections are in place.

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