Insuring Your Business

When you start your business, it’s easy to think that insurance is a luxury rather than a necessity. After all, there are so many other startup costs to factor in. But like car insurance, business insurance protects you from the unthinkable, whether it’s a customer tripping over an extension cord in your shop to the loss of a business partner.

In Washington, you’re required to carry workers’ compensation insurance and unemployment insurance for your employees. If you use your car for business, you either need a rider on your personal insurance coverage or separate business coverage. You also may need specific forms of liability insurance to cover specific aspects of your business.

Here are some of the more common types of insurance you may want to consider:

General Liability Insurance – This covers accidents, injuries, negligence, property damage, medical expenses, libel, slander, legal costs, settlements and judgments.

Product Liability Insurance – If you manufacture, distribute, wholesale or sell a product, this insurance covers you against financial losses due to a defect that causes injury or bodily harm to the end-user.

Professional Liability Insurance –  This is often referred to as an errors and omission policy and it protects you against things like negligence in the provision of a service, printing mistakes and other errors. This type of insurance can be purchased by specific professions, such as healthcare providers who purchase malpractice insurance or performing artists who buy event/venue specific insurance to cover their appearance.

Commercial Property Insurance – This covers everything related to the loss or damage to your business due to fire, smoke, wind, hailstorms, civil disobedience, vandalism, theft, etc. It can include compensation for lost income, business interruptions, the physical structure, computers, company papers and currency. There are two types of policies: All-risk policies cover a wide range of eventualities, except those specifically excluded in the policy, and peril-specific policies which protect you against a specific event such as a fire, flood or criminal activity.

Home-Based Business Insurance ­– Your homeowner’s policy places limits on liability caused by a home-based business. If you are running a business out of your home, you need a separate policy to protect you and your home.

To find out which policies best fit your needs, you’ll want to contact a business insurance agent to go over the various policies, what’s covered or not covered in each, the maximum payout, premiums, etc. Always get a few quotes so you can compare policies.