The Prevent Defense
Don’t Get Sidelined – Protect Yourself
It can be heartbreaking if your business literally goes up in smoke. Business insurance protects your investment against unexpected events such as an injury in the workplace, a lawsuit or mistake, the loss of a partner or a natural disaster.
Many businesses think insurance is an option, a “nice to have,” preferring to put it off until the balance sheet is stronger or times are better. But like car insurance, business insurance covers you against the unthinkable and it not only ensures that your business will continue to remain open, but gives you peace of mind as an owner.
The need to carry insurance varies by the type of business you’re in. Washington State requires employers to carry workers’ compensation insurance and unemployment insurance. You may also have to carry a business policy on your vehicles or on the building you are using as part of a lease.
Here are some other types of insurance you may wish to consider:
GENERAL LIABILITY INSURANCE
This covers you for accidents, injuries, negligence, property damage, medical expenses, libel, slander, lawsuit costs and settlements or judgments.
PRODUCT LIABILITY INSURANCE
If you manufacture, wholesale, distribute or sell a product, you could be liable for its safety. This insurance covers you against financial loss if a defective product causes injury or bodily harm.
PROFESSIONAL LIABILITY INSURANCE
Sometimes referred to as an errors and omission policy, this insurance protects you against malpractice, errors, negligence in the provision of services, printing mistakes, etc. Professional liability insurance can also be purchased for certain professions. For instance, healthcare providers are required to purchase malpractice insurance, which is a form of professional liability insurance.
COMMERCIAL PROPERTY INSURANCE
This covers everything related to the loss and/or damage of your business property due to fire, smoke, wind, hailstorms, civil disobedience and vandalism. It can include compensation for lost income, business interruption, buildings, computers, company papers and money. There are two types of policies: All-risk policies, which cover a wide range of incidents, except those specifically excluded in the policy, and peril-specific policies, which protect against a specific event, such as fire, a flood or criminal activity.
HOME-BASED BUSINESS INSURANCE. Homeowner’s policies do not generally cover losses from a home-based business. If you are running a business out of your home, you may want to consider a separate policy that is specific for your home-based business, which can cover many of the events outlined in the types of insurance covered above.
To find out which policies best fit your business, you’ll want to contact a business insurance agent to weigh the cost and benefits of having different levels and types of coverage for your business.
Whether it’s caused by nature, humans or technology, a disaster will impact your business. It’s a matter of when, not if. Any disruption to your business affects your pocketbook, employees and the community at large and it’s far less costly to plan for a disaster before it strikes than it is to recover in its aftermath.
To help you protect your business, the Department of Commerce has developed an online disaster/crisis planner called: When Trouble Strikes: A Small Business Crisis Planner. It will walk you through everything you need to know to prepare, weather and survive a crisis, from an earthquake to embezzlement.
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