NYC Insurance Blog

5 Types of Insurance Policies You Should Consider When Starting a Business

Have you recently started a business? If so, you realize that self-employment comes with responsibilities. One of the things new business owners should know about is insurance. You expose yourself to certain risks from the day you start a business. Insurance policies protect you and your business from financial losses and lawsuits from unforeseen incidents. Moreover, insurance cover is a legal requirement when starting some businesses. Here are five types of insurance policies a business must have as soon as possible:

Business Owner’s Policy

A business owner’s policy (BOP) is arguably one of the most important insurance coverages when starting a business. The insurance policy includes commercial property insurance (business hazard insurance) and general liability insurance. Therefore, BOP provides liability and property coverage for your business.

• General liability coverage – the policy covers the costs of lawsuits from people suing your business over property damage or bodily injury. General liability coverage also pays all legal fees related to advertising injuries.
• Commercial property insurance covers the replacement or repair of destroyed, stolen, or damaged business property. Commercial property insurance is a good investment if your business is vulnerable to burglary, fire, or physical damage. Our Agency can get you a Quote for your Business in Minutes!

Worker’s Compensation Insurance

Upon hiring the first employee, you should consider purchasing worker’s compensation insurance. The policy covers medical treatment, disability, and sometimes death benefits if an employee is injured or dies at work. Even though your employees seem to engage in low-risk duties, slip and fall injuries or certain medical conditions like carpal tunnel syndrome could result in a hefty claim and financial loss. With worker’s compensation insurance, a business attracts qualified and loyal employees, thus improving the work output.

Business Income Coverage

Also known as business interruption coverage, business income coverage covers lost income when the physical property is damaged by a covered event. During the restoration period, approximately 30 days, business interruption coverage pays for lost wages and additional expenses. Business income coverage covers the following:

• Tax and loan payments
• Lost of profit for the restoration period
• Employee wages & payroll
• Mortgage & rent payments

However, it is essential to note that business interruption coverage excludes:

• Epidemics, viruses, and diseases
• Extreme weather occurrences, for example, flood
• Nuclear hazards
• Government seizure and acts of war

Cyber Security Insurance

Also known as cyber liability insurance, cyber security coverage covers costs related to cybercrimes involving your data and network. Therefore, if crucial data is stolen, hacked, or held hostage, cyber security insurance covers the fees to notify the clients, manage the crisis and restore the system. with cyber security, business owners are protected from any cyberattack financial losses.

Umbrella Coverage

Accidents happen, and you might face a lawsuit that exceeds your policy limits. With umbrella coverage, you will always enjoy financial protection regardless of the hurdles you face running your business. If you lose a lawsuit for a sum greater than what your insurer will pay, you can end up closing your business and losing all your savings. However, you can have peace of mind by purchasing umbrella coverage.

Your business can avoid huge financial losses from a lawsuit or catastrophic event with the right insurance coverage. Consult an insurance expert to determine the types of insurance policies to buy. Finally, shop around and get quotes from at least three insurance companies to make the right choice.

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