Your business should be covered by a solid insurance policy well before you open your doors or take on your first client. In addition to being a legal requirement in most municipalities, your insurance is also going to be your first line of defense against a wide array of risks and liability issues. Without the proper insurance policy in place, a single mistake could bring your company to a grinding halt. Here is a look at three types of insurance that every business owner should budget for.
Workers’ Compensation Insurance
Many small business owners don’t realize that they must have workers’ compensation insurance as soon as they hire their first employee. If you have salaried or hourly employees working for you and they aren’t covered by workers’ compensation insurance, then you could face a long list of penalties ranging from huge fines to time in prison. WorkCompLab explains that although workers’ compensation originally covered physical injuries, it has been expanded to cover repetitive damages such as carpal tunnel. In some cases, it will also cover illnesses that are associated with certain jobs and existing ailments that are worsened by working conditions.
The primary goal of professional liability insurance is to protect you and your business from any legal issues that come up over the years. According to Insurance Center Associates, this coverage protects business owners, providing services against, errors, negligence, or omissions, as well as malpractice. An example of this would be a customer filing a claim against your company because they fell on your property and now have overwhelming medical bills. It is also going to protect your company’s assets if any employees cause injuries or property damage. Without this type of coverage, one mishap might tie up your resources and drag your company’s name through the mud.
Commercial Auto Insurance
According to ASIRT, over 37,000 people die in road crashes in the US each year, and an additional 2.35 million are injured or disabled. Many of those collisions involve commercial vehicles. When you purchase a vehicle for your company, you must add an insurance rider that boosts your coverage. Even if the primary driver has private insurance, the company will be liable for any accidents. Commercial auto insurance tends to be more expensive, but it also has much greater coverage. Your commercial auto policy will also cover private vehicles if they are used to transport commercial goods or run company errands.
As your business continues to grow, your insurance needs are going to evolve. That is why you should revisit your insurance policy at least once or twice a year to see if any riders need to be added or removed.
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