If you are starting a business, you have put a lot of time and effort into ensuring its success. Every business comes with some risks that, unfortunately, can cripple it before it gets off the ground. The lack of proper insurance coverage against these risks is something your business cannot afford, especially when you consider the cost of many claims. There are different insurance options for different situations and types of businesses, but we will cover the ones every small business needs below.

General Liability

General liability insurance is also known as a commercial liability or business insurance and is a must-have for all businesses. This type of insurance helps cover numerous claims including property damage, advertising, personal injury, premises damage, bodily injury, and more.

General liability is crucial due to the numerous types of accidents it covers. It is typically more expensive than other insurance types, but its cost is very affordable compared to the average general liability lawsuit which can reach upwards of $1 million.

Product Liability

Product liability is generated towards businesses that produce, distribute or sell products. It covers any claims arising from product defects including injuries and other types of losses. Bodily harm caused by products is, unfortunately, fairly common and businesses have had to pay huge sums in claims or settlements in the past.

Product liability also covers product recalls. Recalls happen when the manufacturer has to recall a defective product that injures or otherwise harms their customers. Recalls can be expensive because they not only include the actual recall process but also compensation for customers for injuries or harm caused by the recalled product.

Commercial Property Insurance

Unless your business runs entirely online, you need a property to operate from. Property is one of the largest expenses for a business and its definition is broad enough to include the building, equipment, documents, cash, and lost income depending on the insurance policy you sign.

Because you should never buy something expensive without having it insured, every business should have commercial property insurance. Depending on the policy, the insurance can cover different causes of accidents and loss including fires, extreme weather, smoke damage, and vandalism. Do note that most commercial property insurance policies do not cover damage caused by earthquakes or floods and so you would have to buy separate insurance for those.

Workers’ Compensation Insurance

Workers comp insurance is a necessity for all businesses, so much so that some jurisdictions require that businesses have it before opening their doors. This type of insurance helps cover medical expenses, employee benefits, and lost wages in case an employee gets injured on the job.

These costs can be very high, and this is why it is never a good idea for small businesses to pay these expenses out of pocket. Additionally, the risk and cost of a lawsuit arising from an employee’s injury are never good for any business, especially a small one.

Businesses that do not have workers’ comp insurance risk criminal charges, penalties, and fines if they do not comply. Doing so is easy because there are lots of affordable workers’ comp insurance options you can get for your business today.

Commercial Auto Insurance

Commercial auto insurance covers costs associated with an auto accident involving a company-owned vehicle used for business activities. This insurance can pay for vehicular and property damages as well as medical expenses even in the case of a fatality. This type of insurance can also pay for a third party’s medical expenses because not doing so can result in a personal injury suit that can become very expensive.

Remember that this insurance is different from personal car insurance. Personal car insurance will not cover third-party claims, and you need a different type of insurance for that. Hot shot truck insurance is also a kind of commercial auto insurance. Traditional pickup trucks are used in the hot shot trucking industry to effectively and quickly transport cargo from one location to another. The type of insurance needed for hotshot trucking will cover potential injuries (to yourself and others), physical damages to vehicles as well as injury to your person.

Professional Liability Insurance

Professional liability insurance is meant for businesses that provide services instead of physical products. Also called Errors & Omissions (E&O) insurance, it helps cover lawsuits that allege you made a mistake when providing a service. For example, an accountant who makes a mistake that causes someone to be pursued by the IRS will need professional liability insurance when they sue them for damages.

Employment Practices Liability Insurance

Employment practices liability insurance is critical for any small business that has employees. It helps protect against different types of claims including:

• Sexual harassment
• Breach of employment contract
• Wrongful infliction of emotional damage
• Negligent evaluation
• Wrongful termination or discipline

Many of these claims come down to an employer’s word against their employees unless one has evidence of what they allege happened. The problem with these types of suits is that reputation damage might be done before the matter is settled. Having the right insurance and policies for handling such issues in place can help protect the business from such incidents.

Home-based Business Insurance

This is a relatively new type of insurance that is geared towards those who run their business from home. According to The U.S. Small Business Association, 50% of all small businesses begin at home. Many of these business owners mistakenly think their homeowner’s insurance will cover their business.

If you start a home-based business, you will need a type of insurance that is geared towards such businesses. It should cover property and equipment damage as well as other liabilities associated with the business.

Data Breach Insurance

While small businesses do not typically hold the massive amount of data larger businesses do, the data they have is still valuable to malicious actors. With the accelerating digitization of small businesses and an increase in cybersecurity threats, businesses must protect themselves at all times.

This includes not only having popper cybersecurity practices in place, but also the right insurance. Data breach insurance helps with costs associated with the loss of personally identifiable information. Such insurance will cover notifying the affected parties, paying for identity theft, and creating a public relations campaign to nullify any public relations nightmares that might come up.

While the types of insurance coverage you get will depend on your business, you should get as much coverage as you can. Also, ask your insurance provider if they can bundle some of these policies to keep costs down.