Five basic small business insurance types

Businesses need to be covered against risks. Small business insurance coverage is a good risk management tool. While there are many types of policies available, there are five basic concepts that need to be covered by your insurance coverage.

Property Insurance

Your company’s assets should be covered by adequate property and casualty insurance. This type of insurance helps by limiting your liability and providing coverage against losses incurred as a result of damage due to fire, electrical surges, flooding and even employee embezzlement.

Liability Insurance

If your business is sued for negligence, liability insurance covers you against these legal claims that hold you liable for error or injury, regardless if it was an employee's fault or due to errant policy.

Commercial Auto Insurance

Your personal car insurance does not cover vehicles used by your business. You need specific business insurance coverage designed for commercial automobiles. This will cover you against property damage to the business's vehicles as well as the damage that is caused to other parties by your automobiles.

Employees’ Insurance

The people who work in your organization are at the center of your business. They need to be covered by workers’ compensation claims, health and life insurances. Workers’ compensation systems differ as per the rules set by the state, so a self-insured employer may be allowed to opt out of the system.

Protecting Your Income

When disaster strikes your small business, the physical damage may be covered by property and casualty insurance, but any subsequent loss of cash flow and potential profit goes uncovered. Business interruption insurance is an important weapon in the arsenal of your small business insurance policies. It insures against the loss and damage to the business's cash flow as a result of an interruption like fire damage.

Getting adequate small business insurance goes a long way in creating a successful business enterprise. Keep your business insurance needs in mind while consulting with an insurance representative or agent. Mitigate your risks by making the right choice of business insurance policies.