There are a lot of things that you are going to have to think about when you are starting a business, one of the most important is business insurance.
There are some types of insurance that you absolutely have to have and others that are optional. It is important that you understand all of your insurance needs when you are starting a business.
The most important type of business insurance that you have to have is liability coverage.
In most cases this will be required by law and even if it isn’t you would be crazy to run your small business without it. If somebody gets hurt using your product or on your company premises you are financially responsible.
The cost of an injury can be huge so you need to make sure that you are protected.
Liability insurance is something that you absolutely have to have. Most other types of business insurance are optional but usually you should have them.
The next type of business insurance that you are going to want to have is to cover any buildings or equipment that you use in running your business.
There are a lot of ways that these can be damaged, either through an accident, or a fire or criminal activity. In most cases the equipment that you need will be very expensive.
In addition if it is damaged your business will likely be shut down until it is fixed. Therefore you want to make sure that you have the money available to get it fixed as soon as possible.
If you have employees for your business another type of insurance that you have to have is workers compensation.
This one is not optional if you have employees you are required to have it. If an employee gets hurt at work you are responsible not only for their medical bills but also for any lost wages.
If somebody suffers a serious injury in which they become disabled the cost can run into the millions of dollars.
Clearly you are going to want to have insurance to cover this so you aren’t paying it out of your own pocket.
Business Interruption Insurance
Another important type of insurance that a lot of people don’t think about it business interruption insurance.
This is to cover the expenses that you incur if your business is shut down because of something like a fire. You will need to have insurance to pay to repair or replace the equipment and buildings that are damaged of course.
However it takes time for these things to get fixed, during that time your company is not earning any money. A lot of companies fail because they don’t have money to tide them over until they are ready to start up again.
Business interruption insurance will cover you for this so that you can get back into business.
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