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7 different types of business insurance - are you protected? by Davis Law Group PC

Protecting Your Business: What Type of Insurance is Right for Your Company?

October 9, 2019 Douglas Davis

As a small business owner, you’ve likely invested lots of time, money and personal sacrifice into making your business a success.

That’s why business insurance is such a good idea to help protect your investments in the event of unexpected damage to property or lawsuits – both of which could have devastating effects on your livelihood. The kind of insurance(s) you may need will depend upon the nature of your business. We’ve listed several options below that you may want to consider.

Worker’s compensation insurance

is required by state law for most employers. It covers the medical expenses and part of the wages of employees who suffer a work-related injury. There could be fines or even criminal penalties if your business does not purchase the required amount of coverage.

General liability insurance

is a broad type of insurance that protects small business owners, their businesses, and their employees if a third party is injured by the business’s property, products, or services. It generally covers losses stemming from bodily injury, property damage, medical expenses, advertising injuries such as libel, slander, or misappropriation, and expenses from lawsuits. Additional coverage is usually available, depending upon the particular needs of your business.

Property insurance

protects against loss of or damage to the business’s inventory, equipment, office space, and other business property in the event of fire, vandalism, theft, and some weather-related damage. Even if your business is home-based, this type of coverage is important, as homeowner’s insurance may not cover business losses. Additional coverage should be acquired if your business is located in a region prone to natural disasters such as hurricanes or flooding as we experience here in Hampton Roads. Standard property insurance policies don’t cover these types of events.

Professional liability insurance,

also known as errors and omissions or malpractice insurance, protects your business against costs from lawsuits resulting from errors, malpractice, or negligence and is usually obtained by professional service providers such as doctors, lawyers, or architects.

Product liability insurance

protects businesses that manufacture, design, distribute, and sell products against losses stemming from a defective product that causes harm or injury. If a customer sues you after being injured by a defective product, the insurance will cover a damage award to the customer and other costs of defending the lawsuit.

Employment practices liability insurance

protects your business against costs from lawsuits for employment discrimination or wrongful termination claims brought by your employees. This type of insurance can be especially important for smaller businesses that do not have human resources or in-house legal counsel.

Key person insurance

protects a business against the lost business income that can result if the business owner or a key manager or employee becomes disabled or dies. The proceeds of the insurance can be used to keep the business afloat during the transition to a replacement, as well as to hire and train the replacement, pay employees, or implement other measures to compensate for the loss.

How to Decide

These insurance options can provide essential protection for your business, but failing to obtain the right types, or having a gap in your coverage, could ultimately be much more expensive than the cost for the policy premiums. At Davis Law Group, we understand that choosing the right policies and coverage for your business can be confusing, which is why our experienced attorneys work with our business and corporate clients to help ensure their businesses, livelihoods and sacrifices are safe and protected. Call us today to set up an appointment to discuss your business insurance options and coverage.