“Business insurance: nobody wants it, but everybody needs it.” – Unknown
It hurts to pay insurance premiums before you’ve faced a crisis. Once you face a crisis and insurance comes to your rescue, you feel as if buying insurance was the best ever decision that you made as an entrepreneur. Life is absolutely uncertain, and so is the business world. You never know what is waiting ahead for you in the very next moment.
Take the example of the pandemic; no one knew that after December 2019, our lives would change forever. Masking, widespread sanitation, and vaccinations will become the new norm. To date, no one knows when we’ll return back to the carefree times when the ominous clouds of Covid-19 did not rain peril on us.
Followed by the impact of global lockdowns, many small businesses had to shut down worldwide. The economy crashed, and business recovery seems challenging even today.
Although there is no way we can absolutely safeguard ourselves against problematic situations and happenings, we can still best equip ourselves to deal with them through extensive preparation. Now, let’s discuss seven types of insurance that can steel your business for crisis management:
7 Types of Insurance to Ensure the Longevity of Your Business:
1. General Liability Insurance:
General liability insurance is also known as business liability insurance. It helps protect your business from claims of bodily injury and property damage. For example, suppose an employee damages an artifact or something else when working at a client’s home. In that case, general liability insurance will help you pay for the damages done to the property.
Otherwise, you’ll have to bear the entire expenses on your own, which is definitely not easy at times. The repairs may involve high costs, which may take a huge toll on your pocket. Moreover, general liability insurance also protects you, your employees, and vendors in case of on-premise injuries.
In fact, it also covers you against advertising injuries. If your company is found to be guilty of stealing someone else’s advertising ideas, slander, or invasion of privacy, general liability insurance will protect you.
If you buy this insurance, you’ll no longer have to worry about the costs involved in repairing property damages done at your clients’ premises by your employees or settlements from a client’s lawsuit.
2. Commercial Auto Insurance:
Commercial auto insurance, as the name suggests, commercial auto insurance is related to your company-owned vehicles. It helps cover property damage and other bodily injuries that may occur in case of an accident. You may need specific commercial car insurance coverage for transporting clients.
Commercial auto insurance can cover all your vehicle needs, whether you own a car, truck, or any other automobile. There are three basic parts of every commercial auto insurance policy: physical damage insurance, liability insurance, and other coverage. All three of them have been discussed below:
- Physical Damage Insurance:
Physical damage insurance covers collision and comprehensive coverage. Comprehensive coverage typically covers third-party liabilities such as theft, natural disasters, and damage caused by an animal.
- SR22 Insurance
SR22 insurance is just like a financial responsibility certification required by court order following a conviction for major traffic offenses.
- Other Coverage:
Other coverage includes medical payments, towing and labor, rental reimbursement, and related things.
Along with the basic features of commercial auto insurance, you can also buy add-ons depending upon your needs. Some examples are roadside assistance, new vehicle replacement cost coverage, and expanded towing.
3. Professional Liability Insurance:
It is not easy for a business to offer products and services to consumers. Sometimes, minor defects in products and services can cause great damage and throw a company into a lawsuit.
If something similar happens to your company anytime, you won’t have to worry about the expenses involved if you have professional liability insurance. It covers legal claims against your company related to negligence, misinterpretation, and inaccurate advice.
If your small business offers services and products that may cause any trouble to your customers, you should get professional liability insurance right away. Furthermore, as you can’t anticipate all the troubles that may arise from your products, even if you feel the probability of damage occurring to your customers is extremely low, buy professional liability insurance.
4. Data Breach Insurance:
Today, data breaches have become a major cause of concern for the world. As your company also gathers various types of data about customers and their preferences, you may land into great trouble if data breaches happen at your end.
Given the cybersecurity measures that you can employ, the probability of such instances may reduce to negligible amounts, but it will still not be null. So, it is better to protect yourself with data breach insurance beforehand.
Suppose your small business becomes a victim of a cyber attack. In that case, the insurance coverage can help you notify the affected clients, offer credit monitoring services to the victims, and hire a public relations firm.
Furthermore, there are some add-ons that you can buy along with the data breach insurance to safeguard your business even more. Extortion coverage, business income, and extra expense coverage are some examples.
5. Public Liability Insurance:
Accidents occur without any notice. Even if we are extremely careful, they may occur, and in fact, they do occur. No one intentionally slips on the floor or gets their hand burned by a flame. It’s life, and things like that happen continuously. Wondering what public liability insurance has to do with that?
This type of insurance protects your small business in case of instances such as a customer slipping on a wet floor, getting hit by something in your organization and so on. Public liability insurance covers compensation as well as related defense costs.
Without proper coverage, a potential claim may cost you thousands of dollars. If you have to face such claims without proper insurance coverage, over and over again, you’ll be in huge trouble.
6. Business Insurance and Business Interruption:
Business insurance, as suggested by the name, is specifically designed to protect your business in case of any unfortunate events. Theft, glass, and property damage all get covered by business insurance. The best part is that business insurance also protects you against the damages caused by natural disasters such as cyclones, floods, and storms.
As you never know when something bad may happen to your businesses, it is best to buy business insurance and safeguard yourself early on. Moreover, as a responsible entrepreneur, you should also buy business interruption coverage. If, under any circumstances, your business comes to a grinding halt, business interruption coverage will be there to protect you financially.
It can provide cover for the loss of income and the additional expenses that you’ll have to incur to reset your business.
7. Tax Audit Insurance:
Tax audits have become fairly common today. There is no need to worry about them if you pay taxes properly, but the sad part is that these audits involve several expenses. You may have to consult an accountant, a lawyer, or a tax consultant.
Tax audit insurance covers all the costs that you’ll have to incur concerning a tax audit. Doesn’t it seem quite reasonable to buy tax audit insurance?
Proper insurance coverage can be a lifesaver for your small business. You can never prevent threats from coming your way, but you can be prepared to face them head-on. To secure your small business in the best way, you should consider buying the different insurance policies mentioned above.
You may not like it, but paying premiums today will repay you great rewards in the long run if your business ever runs into trouble.