7 Types Of Business Insurance Your Company May Need
by Sumona Insurance 13 January 2023
Insurance is one of the best investments that a business can make to protect its assets and minimize liability.
This is only true if you invest in the right kind of insurance, though — if your coverage is mismatched to your needs, or if you don’t have enough coverage at all, you will still face preventable risks.
In order to properly protect your company, then, you need to carefully consider the following seven types of insurance.
Top 7 Business Insurances For Company Needs
1. Employment Practices Liability
Employment practices liability insurance — also simply called EPLI — is essential coverage for any company that recruits and hires employees. Since this statement applies to most businesses, most businesses need this form of coverage.
An EPLI policy covers allegations of unfair hiring practices, wrongful termination, and any potential legal expenses that may arise from these allegations. It may also include coverage for allegations of discrimination or harassment in the workplace.
2. Workers’ Compensation
Workers’ compensation is yet another essential insurance policy for companies to carry — and in most cases, it’s legally mandated. If your company is covering the cost of pharmacy benefits management in addition to workers’ comp coverage, though, you may be able to save your company money by outsourcing the former process to a dedicated workers’ compensation PBM company.
Larger companies shouldn’t waste resources on handling the pharmacy benefit obligations that accompany a workers’ compensation claim. Enlisting help from a PBM can simplify this part of the process and allow your company to minimize liability throughout the claim settlement.
3. Errors & Omissions
Errors & omissions insurance is a unique form of coverage that specifically accounts for the risk that a client may allege negligence and initiate litigation. In other words, if you or another member of your business makes a mistake while rendering professional services, errors & omissions coverage can provide protection from the legal liability that you may face.
Typically this form of insurance will cover the costs of a court case as well as any settlements that may arise from the case, too. The coverage limits for these benefits will be specified in the policy’s contract.
4. General Liability
General liability coverage is another important form of insurance that businesses may need to invest in. This kind of policy covers damages that arise from claims of bodily harm or property damage. If a customer were to allege that they suffered an injury as a result of your business’s actions, for example, this kind of coverage would protect your company from the claim.
5. Commercial Property
Similarly, your company should consider investing in a commercial property insurance policy if you maintain physical premises or if you serve customers at a brick-and-mortar store. This insurance offers coverage in the event that an accident such as an explosion, fire, or storm causes damage to the structure of your business.
If this happens, commercial property coverage can cover the costs of repairs as well as any items that may have been damaged or destroyed. This is particularly important for businesses that store merchandise or equipment in a physical location. Protecting the value of these assets is imperative.
6. Business Income
If a catastrophe such as one of the aforementioned incidents happens, it’s also possible that your business income may be interrupted while you wait for repairs to be completed. In this case, business income insurance can come in handy because it will cover the lost income and other expenses that you may encounter as a result of the business interruption.
In order to exercise this coverage, though, the interruption must result from a qualifying event per the terms of your policy. In most cases, qualifying events include natural disasters such as floods, earthquakes, mudslides, and other events that cause substantial property damage.
7. Product Liability
Finally, if your company is in the production sector, it’s imperative to invest in a product liability insurance policy. Product liability insurance protects companies from allegations of harm stemming from unsafe products. There are countless product recalls and related lawsuits every year, so this form of insurance is especially important for businesses in this industry.
This coverage will typically cover the costs of settlements related to bodily harm or injury, property damage, and other damages that were allegedly caused by a faulty product. It may also cover the costs of litigation if further legal action ensues.
No matter what industry your business is in, having the right insurance is imperative to minimize liabilities and protect your company. Consider which of these types of insurance you need and secure the best coverage.
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