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Types of Insurance All Business Owners Need

Updated: Sep 20, 2020

Types of Insurance All Business Owners Need

If you own your own business, you might assume it’s obvious to need small business insurance. What most people do not realize is that there are more types of insurance that you need as a business owner. There are many different things to ensure regarding your business. However, it will depend on the details of your business.

A Good Start

A good place to start is liability insurance. This protects you in the event that you, any of your employees, or your goods or services cause harm. This includes both bodily injury and property damage. Next up would be property insurance. This will protect any buildings, equipment, and tools you might own for your business. If you have any business vehicles, you will also want to secure commercial auto insurance. This will cover them in case of any damage or collisions.

Insurance for Employees

All 50 states require employees with W-2 employees to have worker’s compensation insurance. This coverage will provide wage compensation and medical benefits to workers who are injured on the job. In accepting said benefits, employees forfeit the right to sue their employer in the case of injury.

Another type of insurance you might want to consider is directors' and officers' insurance. This protects the company leadership from any lawsuits that might arise from the decisions they make. Sometimes, changes can significantly impact the profits of a company, which might incite people to legal action.

If your business deals with sensitive or confidential information, whether related to employees, clients, or both, you might want to secure data breach insurance. This is especially important if you are responsible for storing such information in your offices. If there is a breach, whether of paper or electronic files, this insurance will protect against any resulting losses.

Business Owner’s Policy (BOP)

You might be asking yourself if being a business owner has to make the insurance issue so complicated. How is one supposed to know which types of insurance they will need? How can you make sure you are covered before it’s too late? The easiest way to start is purchasing a Business Owner’s Policy or BOP. This policy is a bundle of insurance that saves you money. It is cheaper than securing all the types listed above individually. BOP’s will usually include property, vehicle, liability, and crime insurance. Of course, there is usually an opportunity to adjust the types based on the specific needs of your business.

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