One of the things many small business owners overlook when launching a new company is insurance. On the other side of the fence, those that don’t overlook insurance might buy too much insurance, spending valuable money on protection that isn’t really warranted. Understanding your potential coverage needs is just one of the many things required when launching a company, which is why it’s important to involve financial and legal professionals for help starting your business.
One of the first insurance types you should consider is liability insurance. For many companies, this is a relatively inexpensive coverage that kicks in if someone is injured due to your negligence or issues with your product or service. Not every small business needs such insurance, but if you are going to have clients or anyone else on your business property — or your home property, where you conduct business — this coverage is a good idea. It’s also necessary if you provide a tangible product or service to customers.
You might also consider property insurance to insure your business property. Depending on your policy, this could include covering your building, inventory or equipment. If you have a certain number of employees working for you, then workers’ compensation is required, and you might want to consider providing employees with options for health care coverage.
Other types of insurance you might consider include product liability insurance, vehicle insurance for company vehicles or fleets and coverage in case business is interrupted by an act of God or failure of equipment or power. While you should consider your insurance options as soon as you start to plan your business, you can make changes to insurance coverage as your business grows to accommodate new needs.
Source: Entrepreneur, “7 Types of Insurance You Need to Protect Your Business,” John Boitnott, accessed July 01, 2016