When it comes to shopping for insurance policies for your small business, it’s important to understand exactly what kind of coverage you are going to need. There are several different forms of insurance specifically designed to protect you from a variety of unfortunate incidents.
Unfortunately, most small business owners are not aware of the legal protection which comes as a result of certain policies. Knowing your rights and understanding just exactly what each policy covers is crucial to ensuring the protection of your business, your product and your people.
Most businesses know that they need general liability insurance and product insurance. However, the following four types of insurance outline policies are lesser known but crucial for creating a well-rounded insurance coverage. Adding these types of insurance into your policy will ensure that your losses are covered through a wide array of situations.
Type #1: BOP (Business Owner’s Policy Insurance)
Business Owner’s Policy Insurance—or BOP—functions as an all-around insurance coverage policy. According to Forbes business magazine, “Often, BOP’s will include business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance.” The coverage under BOP is customizable. This allows you to choose coverage and riders which will tailor to your specific business.
For example, if you do not own your property but rent your storefront, property insurance can be replaced with renter’s insurance under certain companies. Having the ability to swap out different forms of insurance gives the business owner the flexibility to create balanced coverage while having a premium which reflects the true value of what they are receiving.
BOP ensures business owners are not paying any more they need to by giving them exactly the coverage they need and nothing extraneous.
Type #2: Professional Liability Insurance
Unlike general liability insurance, professional liability insurance offers security in the face of damage rendered by unorthodox use of professional services. The most common use for this form of insurance is for damages suffered due to a failure to properly perform duties. This kind of insurance can cover technology firms, law firms, consultants, notaries, hair salons, boutiques… The list can go on forever. While the specifics of what is covered is outlined in each business’ individual contract, professional liability coverage protects the business from accidents specifically related to working in their given field.
Type #3: Worker’s Compensation Insurance
Worker’s Compensation Insurance pairs very well with professional liability insurance. Worker’s Compensation allows workers to be paid for time off due to work-related injury or medical conditions. This form of insurance offers businesses the opportunity to provide for their people in the instance that their people are hurt accidentally on the job. In exchange for this compensation, the worker gives up his or her right to sue the employer for damages—physical or psychological.
Worker’s Compensation is required across all 50 states for those companies employing staff members under the W-2. While laws differ from state to state regarding what Worker’s Compensation needs to cover, there are stiff penalties for any company who meets these qualifications and does not have Worker’s Compensation Insurance.
Type #4: Life Insurance
Many firms also offer their employees a life insurance policy as part of their employee benefits. Employees need to choose to invest into this life insurance policy, but are usually given a reduced rate because the application is given through the company. Most companies end up investing in universal or whole life policies that have a group dynamic to offer both the company and their people the cheapest premium possible. However, this form of life insurance often does not give the worker’s beneficiary suitable compensation in the case of the worker’s death. Oftentimes these policies are so low in their death benefit, the family has not had time to sufficiently grieve before the funds run out. In some cases, the death benefit does not even cover burial.
An alternative form of life insurance to Universal or whole life would be to work with a company which offers workers the chance to invest into term insurance. Term insurance e has varying premium rates based on the amount of coverage an individual needs. The individual is able to choose how long they need coverage for and how much coverage they need which means that they will get reduced rates when it comes to choosing their insurance type.
Overall, these four types of insurance policies are specifically designed to help small businesses do the best for themselves and for their people.
BOP’s are well-rounded policies which give you the opportunity to pick and choose exactly what coverage you need. Professional Liability Insurance protects you and your business from accidental damages done on the job. Worker’s Compensation protects you from your employees’ rights to a lawsuit while allowing you to care for your injured man or woman during their convalescence. Lastly, life insurance policies ensure that your workers’ families are cared for in the instance that the worker passes away.
From a BPO to individual life insurance, researching in-depth the different policies available for your business is crucial to ensuring that you secure your investments.