Types of Insurance Every Business Owner Must Consider

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In an ideal world, your company would operate smoothly, your employees would be happy, and your customers would be satisfied, leaving no one to put your brand in jeopardy. Alas, this is not how the modern business world works, and as an entrepreneur hell-bent on making it big in the competitive marketplace, you cannot hope to ensure long-term success without a comprehensive insurance package.

Nowadays, anyone and everyone can take legal action against your company for a myriad of reasons, and no matter if you win or lose, this is not the type of publicity you need. It is, therefore, your duty to obtain ample coverage against all possible risks in order to ensure smooth sailing in the long term. With that in mind, here are the primary insurance types you should consider.

Professional liability insurance

The first type of insurance that every business owner should look into is professional liability insurance. Under this policy, you are protected from lawsuits from unsatisfied clients claiming that your service and advice was erroneous and therefore detrimental to their own business. If you’re offering professional services, obtaining this insurance type should be your no.1 priority.

After all, what’s stopping any one of your clients to try and get their money back regardless of your performance or the quality of your services? Rather than getting caught up in lengthy and costly legal disputes, simply let the right type of professional liability insurance stop any nefarious actions towards your company dead in their tracks.

Property insurance

For every brick-and-mortar business out there, obtaining property insurance will be essential. This type of insurance is used to cover the expenses associated with property damage, within the covered amount and scope of the policy, of course. You can tailor the extent of your property insurance policy to cover additional scenarios and property features.

Remember that this type of insurance can and should cover all contents of your business, as well as the costs of preventing any further damage to the property. You can also use property insurance to cover for the businesses’ expenses if the damage persists. Bear in mind that home-based businesses should get a separate insurance policy, as home insurance might not cover the expenses related to business contents.

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Motor vehicle insurance

For the majority of 21st-century businesses, proper car fleet management will be crucial in ensuring employee performance, as well as optimizing day-to-day operations. Luckily, there are companies, like Lytx (https://www.lytx.com/en-us/resources/articles/telematics), that offer fleet telematics systems solutions. This can help fleet managers to keep an eye on all drivers to ensure they’re following regulations and driving the vehicle carefully. However, in order for your employees to feel safe driving company cars around town, you need comprehensive car insurance. This type of insurance, whether commercial or personal, should cover any damage to the vehicle itself, as well as physical injuries that the driver might sustain in case of any incident.

For instance, New Zealand businesses make sure they have comprehensive motor vehicle insurance, such as the one offered by Youi NZ, in order to protect their assets from accidental damage, theft, natural disasters and more. Remember that if your company vehicles are not ensured, you are running the risk of serious financial loss in case of an accident. What’s more, if the driver gets hurt, you could be looking at a crippling lawsuit as well.

General liability insurance

Another insurance policy no modern business should operate without is the general liability insurance, designed to cover the costs of lawsuits taken up by dissatisfied clients. If your business caused any type of harm to a third party, the client might sue you for physical or emotional damage. Needless to say, you do not want to get caught up in a legal battle without adequate coverage.

The general liability insurance will help you meet the legal costs as well as cover the expenses that might arise should the judge fail to rule in your favor. You can also use this policy to cover the medical bills associated with the physical injuries the third party might have sustained.

Business interruption insurance

You cannot accurately predict when a natural catastrophe might strike, and even if you could, there is little you could do to protect your physical office from damage. Should a natural disaster strike, you might have to close shop until the damage is fixed, which in turn means that you will have to endure substantial financial loss during this time period.

Business interruption insurance is specifically designed to help business owners meet their daily operational expenses regardless of the financial loss. This type of policy is therefore essential for brick-and-mortar companies situated in high-risk areas where natural hazards are not a seldom occurrence.

In conclusion

Aspiring entrepreneurs might be eager to step into the competitive marketplace and take over the industry by storm, but there are some crucial behind-the-scenes steps to take beforehand in order to ensure their safe rise to prominence. With that in mind, it’s important to take business insurance seriously so that you can protect your company on all fronts and pave the road to long-term success in the industry.

Colin Shaw
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Written by Colin Shaw

Colin has been in the finance market for over 20 years and specialises in best business practice to make an organisation profitable. The only man for the job when it comes to numbers and accounts with a keen talent for simplifying finance for the wider market.