7 Types of Business Insurance and Why You Need Them

From the day you start a business you become exposed to certain risks. One untoward event, catastrophe or lawsuit can actually wipe out a business before it even gets off the ground. This needn’t happen, however, if you have the proper type and amount of business insurance in place. By taking care of your business insurance needs as soon as possible you can avoid these potential financial losses associated with accidents, injuries or other catastrophic events.

Available Types of Business Insurance You May Need

Business insurance isn't a one-size-fits-all proposition, so it’s important to consult an insurance professional when determining exactly what type of coverage is best for your business needs. Here are some of the most important types of coverage you’ll want to consider:

1.  General Liability Insurance is something every business requires, even small, one-person home-based concerns. General liability coverage protects against legal problems arising from injuries, accidents or negligence claims. This may include claims for payment resulting from bodily injuries and their associated medical expenses, property damages and the cost of defending against lawsuits and judgements. It also includes coverage against libel/slander lawsuits.
2.  Product Liability Insurance is for businesses that manufacture, distribute or sell products, either wholesale or retail. It provides protection against financial losses resulting from claims of product defects that cause bodily harm, injuries or property loss.
3.  Professional Liability Insurance is primarily for businesses providing services to their customers. Also known as E&O (errors and omissions) insurance, this coverage protects against malpractice, negligence and errors in the provision of those services.
4.  Commercial Property Insurance for businesses is similar to homeowners insurance for your domicile, with slight variations. It protects you from loss or damage to your property from a wide range of perils such as fire, theft, vandalism, hail, wind storms and civil disobedience. It may also include lost income benefits. Property insurance may be all-risk, meaning they cover all perils except those specifically excluded or it may be peril specific, covering only those losses specifically listed in the insurance policy.

Other types of business insurance you'll want to consider include:

• Vehicle Insurance
• Workers Compensation Insurance
• Business Interruption Insurance

If you own a home-based business you may want to consider home-based business insurance.  Contrary to what you may believe, your homeowner’s insurance likely does little to cover your home-based business. Depending on the risks, however, riders to your homeowner’s coverage could provide the protection you need.