There is no shortage of costs when it comes to running a small business. You have employee costs, inventory costs, electricity costs; you name it. Business owners are all too familiar with sitting down at the end of the month and watching their hard earned dollars float out to someone else. So as you can imagine, adding another bill to the pile is the last thing a business owner wants to do. Unfortunately, many businesses overlook one of the most important expenses they can have: insurance.
For many, insurance is a dirty word because you constantly pay the bill every month but never really seem to get anything out of it. The reality is proper insurance coverage can be the difference between having a few pieces of paper to sign vs. shutting down your business.
General Liability Insurance
General liability insurance is one of the most common business insurance products and one of the most important. A single accident can bring an entire organization down, and general liability is there to prevent that.
Every business that has clients come to their place of work should have general liability insurance. If a customer is walking through a store and slips and falls, the business can often be held liable for that. A general liability policy can help cover legal and settlement costs.
Business Property Insurance
This coverage is similar to a personal homeowners policy, in that it protects a building owned by the business. Just like individuals, businesses often have a lot of company resources tied into property, and that last thing their bottom line can take is a major repair or rebuild after an accident. Businesses are just as susceptible to fire as houses, and a business property policy will ensure business can move forward as soon as possible without causing a major financial headache.
Business Income Insurance
A type of business property insurance, business income coverage is a less known policy that replaces the income a business earns while they cannot perform their work due to a property loss. For example, if a fire causes a factory to burn down and replacement will take a month, business income insurance can kick in and pay the organization for that lost month’s revenue.
Professional Liability Insurance
PLI, or more often referred to as Errors and Omissions, is an insurance product that protects professional and service industries from lawsuits. The main protection is against negligence on the part of the insured. For example, if an insurance agent forgot to pass a premium check onto the insurance company on behalf of a client and that same client’s house burned down, the insurance agent would be liable for failing to do their job correctly. The underlying insurance company would not pay for the house since the policy was technically not in force, so the insurance agent’s professional liability insurance policy would be on the hook.
This coverage is also important for those in the medical field, though it is often referred to as malpractice insurance. This covers a doctor when a lawsuit comes from a patient claiming they did not perform their job correctly.
Eric Stauffer is a former agent and now reviews insurance companies like Infinity Insurance and Allied. He helps individuals and businesses find the products and services that will best protect their assets.