Understanding the Different Types of Business Insurance

Are you planning to purchase insurance for your business?

First things first, you’ve made the right decision. Purchasing insurance is one of the most effective risk management strategies any business owner can implement.

However, you’ll quickly learn that purchasing business insurance isn’t as straightforward as purchasing, say homeowner’s insurance. There’s no blanket cover that takes care of all the risks your business faces.

This brings us to the different types of business insurance. In this article, we’re telling you about some of the policies you should purchase for your business.

Let’s get into it.

General Liability Insurance

If there’s anything that comes close to being a blanket business insurance cover, this is it. General liability insurance will protect your business from costs arising from various liabilities, such as premises liability. If someone’s injured on your premises and sues for compensation, this policy will pay them.

General liability insurance is the go-to policy for most small business owners, but it shouldn’t be your only one. It’s good to have it, sure, but its coverage limitations can leave your company badly exposed.

Commercial Property Insurance

Your business operates out of somewhere. Are your premises insured against damage?

If not, have you thought about what will happen to your business in the event that the property is razed down by a fire or blown to the grown by a wind storm?

Your business will be no more. If it survives, it will take some time before it can start operating again.

This is where commercial property insurance comes in. It covers several kinds of property damage, ensuring you’ve got the money to make repairs and start again.

Business Income Insurance

There are disruptive events that can also cause disruption to your income. 2020’s COVID-19 pandemic is an example of such an event.

If you have to close down your business, thus generating no income, you could run into massive losses. But there’s little you can do about it because the event that causes the disruption is beyond your control. Business income insurance compensates for the loss of income arising from disruptive events.

As we’re learning from the coronavirus interruption, it’s important to have a good understanding of what your business income policy covers. Don’t assume that just about every disruptive event is covered by your policy.

And, remember that if you can’t find a policy that covers your specific needs, you can always look into captive insurance.

Cyber Insurance

Small businesses like yours are a prime target for online hackers. In 2019, 43 percent of cyberattacks targeted small businesses.

If you’ve digitized your operations, you could face a cyberattack. This attack could cripple your operations for several hours or days, depending on how effectively you can respond to it. An ecommerce site outage can lead to big losses.

Hackers can also steal business and customer information and hold you at ransom.

Cyber insurance will help your business offset some of the costs of a cyberattack.

The Types of Business Insurance You Need

There are different types of business, but you don’t need all of them. What you need depends on the nature of your business and the risks it faces. The ones fleshed out above, though, are a must-have.

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