When starting a new business, there are many things to consider; the insurance you choose is one of them. While there are a variety of insurance policies to cover a myriad of risks, new businesses have a number of policies that are essential for starting off right. If you choose the right new business insurance from the start, you can grow a successful start-up business.
New Business Insurance Tips
The following insurance policies for a new business are the vital ones to choose from. They include policies to cover your most probable risks, as well as those that might be unexpected that could result in a huge loss without the right protection.
General liability insurance includes bodily injury, products liability and completed operations in one policy. It is one of the most important policies to have as a new business since it covers many different types of claims. If a customer injured themselves in your store, the policy will cover their medical costs and any impending lawsuits. General liability also provides coverage for products you sell that cause damage or injury in some way, as well as services you have provided to your customers and clients. You can set the policy limit based on how much coverage you want.
New Business Lost Income Insurance
Another important policy for new businesses to have is business income insurance. All of these occurrences can cause you to shut your doors while the repairs are being made and lose business during this time. For a new business, every day you can’t function normally is a significant loss. Many startups that go bankrupt do so either because they don’t have proper insurance or because they lose too much income early on. This makes it essential that you get lost income insurance. As part of the lost income coverage, you will get:
- Business Interruption Insurance – You may also have an interruption in your business due to damages to your building. If there is a fire that destroys your building and contents, completing repairs and replacing the ruined merchandise could be a lengthy process. This would require an extended period of time without income.
New Business Business Owners Policy (BOP)
To include general liability insurance, lost income, and other coverages in a single policy, consider a business owner’s policy (BOP). A BOP policy is a package policy that lets you save money by including several different types of coverages in a single policy. For example, you can include general liability, products liability, equipment breakdown, building and contents, business income, and electronics data coverage in your BOP. Keep in mind not all policies for new businesses will be included in a BOP, so do your research and find out which you can get before choosing this option.
Your business may also need professional liability insurance. Professional liability, also known as errors and omissions, protects your business from mistakes made during the course of your business. For example, if you have started a finance firm and one of your clients experiences a loss as a result of the financial advice they received from your employee, they could turn around and sue your company. These types of claims are covered by professional liability insurance.
Assess Coverage Adequacy on an Annual Basis
One thing to keep in mind is that the more your business grows and becomes successful, the more risky it is and the more liabilities may arise. Instead of losing your business income or going bankrupt as a result of the continued liabilities, you should adjust your new business insurance policies on an ongoing basis to reflect your current level of business.
After working hard to start your business and make it successful, you don’t want to struggle due to lack of insurance coverage. By considering the most important new business insurance policies, you increase your chances of operating your business without fail.