Types Of Insurance Every Business Should Consider
From the day a business starts, you are automatically introduced to a range of risk factors, some you already know of, but there are others that you may not have thought about.
One lawsuit can extinguish a new business before it has had a chance to get off the ground.
Every business makes mistakes, and accidents happen from time to time, whether you prepare for them or not, so it is essential that you have the right protection for your business in the form of small business insurance.
In this article, we will go through some of the types of insurance every business should have.
What Is Business Insurance?
Business insurance is a form of protection and risk management that protects you and your company from financial loss in the event of a crisis or bad debtors.
This is why it is essential for small businesses to have the right insurance before they do any form of real business, as it can help to cover costs with liability claims.
What Insurance Do Businesses Need?
Professional Indemnity Insurance
If you are a freelancer, then professional indemnity insurance is going to be your lifeline if you have clients that, somewhere down the line, believe that something has gone wrong with the service you are providing.
This is basically when clients try to assume that you did not do the job you were paid for or you did not do it to a good enough standard.
This can be any form of freelancer, too, whether this is a nail technician not doing a customer’s nails well enough, a graphic designer producing a copied design, or if you are a business consultant, you may give the wrong information that could hinder a business progression.
Having professional indemnity insurance covers the cost of defending the allegations. The insurer will also pay to remedy the dispute and pay for the compensation if necessary.
A solicitor can do the same job, but it will cost you a lot more money.
Trade Credit Insurance
If your business trades with credit, then you are going to need trade credit insurance.
This is for any business that deals on a trade basis, for example, If you offer goods or service upfront before you get paid.
With bad debtors becoming a growing issue in recent years, some businesses that deal with this type of business can significantly benefit from this form of insurance.
It is not uncommon for businesses to not pay their policy, and it is common for businesses to become insolvent.
If you have the right cover, your trade credit insurance will cover up to 90% of your losses which is a huge lifeline when dealing with large amounts of money.
This type of cover has a range of benefits as it can help you expand your business without worrying about bad debtors.
When looking for the best policy, speaking to credit insurance brokers will ensure you get the best advice and cover that is tailored to your business.
Cyber Insurance
We now live in the digital era where everything is online, which means that protecting your business technology is more important than ever.
Some businesses should opt for cyber insurance so that they are protected against losses from cyber attacks such as viruses, data breaches, and ransomware.
An example of when cyber insurance is needed is if you are in the healthcare business where you need important information such as medical records, names, and addresses and there is a data breach where other patients have access to other patients’ information.
Having cyber insurance can help to recover losses from this and cover and also help to deal with the issue itself.
Key Person Insurance
Your business will also need key person insurance. This insurance provides cover for any key member of the management team who becomes critically ill or dies.
If there is a death of a key person, key person insurance helps the business to stay afloat as losing a key member is upsetting for the workers, but it can also be devastating to the business.
This is particularly important if you are a small business owner as it provides a level of safety if the worst happens.
This cover helps the loss of revenue for a short period whilst the business is trying to recover.
Any director or top executive should be included in this policy.
Insurance can cover a range of different situations, so you must have the correct cover and policy for your business needs.
It is vital to remember that if you are a sole trader, you will lose everything if you are not covered.
So protect yourself before anything happens.
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Category: Business Insurance
