How do you know which insurance policies your business needs? Generally, coverage tends to vary depending on the industry. However, there are several types of business insurance policies most businesses require to safely operate. Let’s review basic coverage recommendations.
1. Business Owner’s Policy (BOP)
A business owner’s policy (BOP) is a combination of three policies: general liability, commercial property, and business income.
- General liability insurance which protects businesses from bodily injury, property damage, and personal injury claims.
- Commercial property insurance to protect the building you own or rent where you run the business.
- Business income insurance is also known as business interruption insurance. If your business is not open or needs to shut down for a lengthy period, business income insurance replaces lost income.
This coverage is popular with business owners. It is also customizable. For example, you may additionally include a professional liability insurance policy in your BOP coverage.
2. Workers’ Compensation Insurance
Workers’ compensation is a compensation program administered by the U.S. Department of Labor. It is a legal insurance requirement in most states for businesses with employees.
If an employee suffers a work-related injury or gets sick from their job, they will receive benefits through workers’ compensation.
3. State Unemployment Insurance (SUI)
If an employer plans to hire and pay employees more than $300 in wages, they must file for state unemployment insurance.
SUI is an employer-funded tax. Employers pay unemployment taxes on the wages of their employees which eligible workers then receive as benefits. Employers must submit a tax report to the state each quarter after filing for SUI.
4. Cyber Insurance
This is also known as data breach insurance. A cyber insurance policy helps protect businesses from cyber attacks, data breaches and loss of data, and malware attacks.
This coverage can help small businesses pay costs which allow them to notify individuals, like customers, impacted by the data breach. It also assists in paying for monitoring services for identity theft. Businesses which conduct transactions primarily online will need to invest in cyber insurance to ensure the safety of this information.
5. Key Person Insurance
This is also known as life insurance.
If the owner or a critical employee is unable to work, becomes disabled, or suffers an untimely demise, key person insurance helps financially protect the company and its continuity moving forward. This policy also covers expenses in finding a replacement for the business.
6. Commercial Umbrella Insurance
What if a small business experiences other unforeseen circumstances and does not have coverage through their standard policies?
The best approach is to apply for extra coverage through commercial umbrella insurance. This policy helps extend coverage limits as necessary on various insurance policies.
Do I Need Any Other Insurance?
Here are a few additional insurance policies where your business may require coverage:
- Do you have a company car? You may need commercial auto insurance to keep employees and yourself safe on the road.
- Small businesses which manufacture and sell products in the general market need product liability insurance. This policy ensures products are safe to use and do not cause harm.
- If you have employees, obtaining employment practices liability insurance (EPLI) helps protect businesses and their owners from employment-related claims like wrongful termination or failure to promote.
- Health insurance isn’t a form of insurance which protects a small business. However, it’s a great benefit to offer talent you plan to hire.
There are even more types of insurance available for small businesses across all industries. Speak with an insurance agent to learn more about coverage available for your company. Then, choose the right coverage options and enjoy the peace of mind in knowing your small business has the protection it needs.
Protect your small business with SUI insurance. Reach out to MyCorporation at mycorporation.com or give us a call at 877-692-6772.