If you’re about to become a small business owner, one aspect that’s important to think about is insurance. In your personal life, you probably have homeowner’s insurance, health insurance and, of course, auto insurance. After all, accidents happen all the time, and a car accident lawyer in Pittsburgh, or any other city, is going to have a hard time defending you if you don’t.
When it comes to your business, insurance can be critical – you want to protect it with the same diligence that you protect everything else. Yet surprisingly, a report by Marshall & Swift/Boeckh found that three-quarters of U.S. businesses are underinsured, and about 40 percent of small business owners have no insurance at all.
So what insurance should you have as a small business owner?
All small businesses, even home-based businesses, need to have liability insurance. This type of policy will protect your organization if you, your products, services or employees cause property damage or bodily injury to third party. Basically, it covers that business against negligence claims due to harm that results from failure to perform or mistakes. Policies are customized as each industry has its own particular set of concerns.
Whether you own the building your business is based in or have business personal property like computers, office equipment or inventory, you should have property insurance. It will protect your business in case of theft, vandalism, fire, smoke damage and so on. You may also want to think about purchasing business interruption insurance, something that can be added to the policy. That will help protect your earnings if your business can’t operate. Many business owners start their businesses in their own homes – it’s important to be aware that your homeowner’s policy won’t cover a home-based business in the same way commercial property insurance does. If you operate out of your home, ask your insurer about any additional insurance you might need to cover your inventory, equipment and tools in case an unfortunate event occurs.
While state laws can vary, all require a business owner to have workers compensation if they have W2 employees. It provides insurance to those employees if they’re hurt while at work or on job elsewhere, including medical benefits and wage replacement. In exchange, your employees give up their rights to sue if an incident should occur while on the job. It’s a must for any business owner to have as it protects both you and your company from what could be very serious legal issues.
Commercial Auto Insurance
If vehicles are used by your place of business in any way, commercial auto insurance is a must. It protects vehicles that carry products, equipment and/or employees, including trucks, vans and SUVs. Even if your business doesn’t have company vehicles, if you have employees that drive their own cars while on company time, you need to have what’s referred to as non-owned auto liability. That protects your business in case the staff member involved doesn’t have their own adequate coverage.