Business Insurance 101 Introductory Guide

There are many things that we have to think about when we are just planning to start our business and also in maintaining it to keep it alive and running. Joining the business industry is an everyday cutthroat competition. You must do everything to survive and continue to have your customers and supporters. Owners think about lowering their price, having promo deals, discount days, sale days, and even gimmicks like hiring celebrities for endorsements and commercials. 

It is the things that business owners do to protect their respective businesses, they make a partnership with other businesses. Another way to protect your business, not against other competitors but against any future financial loss, is to have it insured through the best and most suitable business insurance plan for it. As beginning entrepreneurs, you may ask yourselves what is business insurance and how is having one beneficial for your business? 

Business Insurance: One way to protect you and your business 

First, business insurance protects the business from losses caused by circumstances brought while the business is in its normal course. It reimburses the amount of financial loss depending on the events covered by the business insurance plan. Insurance companies or providers evaluate the best policies depending on the potential risks for the businesses that may depend on the environment the business is in. 

What Business Insurance May Cover

There are many policies a basic business insurance may cover. There’s even bobtail insurance for driving commercial vehicles without load for non-commercial purposes. This ocean of options may get confusing for the average business owner, and that is why we came up with this quick introductory guide for essential business insurance options that will make sure your business is well covered. As we said, the policies on your business insurance plan will mostly, if not entirely, depend on the environment that your business is in. From there, your insurance agent or the insurance provider will evaluate the degree of the potential risks and what are the possible risks to consider.

The first one is, Professional Liability Insurance reimburses you for the costs of an error made by your business when providing your business. If your business made even just a tiny typographical error and your client lost a hundred thousand dollars because of this error, this insurance can pay you for the potential financial loss it may incur to the company as long as he makes a claim. Professional liability insurance is mostly included in your General Liability Insurance policy.
Followed by Workers Compensation Insurance, which allows you to cover for the cost for your employee who got injured or becomes unable to work because of work-related causes. Other insurance companies are generous to provide even the cost to prepare the employee when he is ready to go back to work. Another benefit of this is it can help cover the legal fees if the family of the employee decided to sue your company. 

The third is the Data Breach Insurance. Now, be aware and always read the contents of your policy and consult your provider if they really provide this insurance. Other insurance companies offer this insurance on a separate Cyber Insurance and is usually not included on a business insurance. However, if it is included, data breach insurance can cover for the loss due to any cyber-attacks or internet-based risks like hacking and for teams responsible for the data recovery. Some insurance companies also provide for the course to teach you the best practices to further your cyber protection and tighten the security.

If your company is located in a flood-prone area or areas that are always at risk of having heavy amounts of snow when it’s season, we greatly advise you to include Commercial Flood Insurance on your business insurance plan. It covers the cost for the repairs of any equipment, structures, etc. that was destroyed by flood. It is like business interruption insurance, which covers for the losses of a business caused by disasters. 

Aside from the workers compensation insurance, Commercial Auto Policy can also be included on your insurance plan to cover for the costs of any work-related accidents involving driving. It works just like the former, and will pay for the cost that may be incurred by the medical bills of the injured employee as long as it is business related. 

Important Takeaways

A Business Insurance Plan can cover many specific and particular plans, however some insurance companies may not provide the policies that you are looking for but are offered by some. Always remember, before accepting or even before applying to the insurance company, read their offers, their quotes for business insurance policies, and everything that is included within each policy and what is not. When it comes to applying for business insurance, it is not safe to assume what is covered based on the title. Consult the opinion of your trusted financial advisor about these matters if you are unsure of something.