While 40% of small businesses don’t resume operations after a catastrophe, those with a continuity plan reopen more easily, as reported by the Federal Emergency Management Agency (FEMA). Some of the ways to create a business continuity plan include identifying the biggest potential risks, purchasing the right business insurance coverage, and protecting your data in the cloud, as per the Small Business Administration (SBA). Lawsuits and property claims can cause a significant drain on tight finances. An appropriate business insurance policy can help mitigate some of the risks of owning a small business.
Here’s a quick look at four insurance policies that can boost your business.
Professional Liability Policy
If you run a service-focused business, such as a consultancy, real estate, or architecture, your clients may sue you if the project does not go as planned. For example, breach of contract and alleged dismal performance are some of the issues for which you can be sued. A professional liability policy protects you against such lawsuits, per the International Risk Management Institute (IRMI). Take note that you don’t actually have to be in the wrong to be the subject of a professional liability lawsuit. Having professional liability coverage protects you whether you are at fault or not.
Every year, U.S. businesses lose a lot of money due to disasters such as wildfires, hurricanes, and earthquakes. For example, in 2018 alone, the U.S. economy lost more than $50 million worth of insured property to natural calamities, as reported by the Insurance Information Institute (III). Other causes of property damage include vandalism and theft, which often significantly affect small business finances. The right property insurance can help your business bounce back after property loss.
Workers’ Compensation Insurance
On average, about 2.8 per 100 workers get injuries or contract illnesses on the job in the U.S. annually, according to the U.S. Bureau of Labor Statistics (BLS). That’s why all states other than Texas require employers with one or more employees to purchase workers’ compensation insurance policies for their employees. This policy covers the medical costs and lost wages for employees who suffer work-related injuries or illnesses, protecting your business from exorbitant claims and financial harm, says the National Association of Insurance Commissioners (NAIC).
General Liability Insurance
Over half of small businesses in the U.S. get sued at least once, as reported by the Small Business Administration (SBA). Causes of lawsuits include third-party injuries, breach of contract, employee harassment and discrimination, and intellectual property rights. Litigation not only hurts the business’ finances but also affects the business’ reputation and causes mental hardship to the owner. If you are subjected to a lawsuit, you may have to pay legal fees, claims, and compensation costs out of pocket, and this is what general liability insurance covers.
Consider the preceding four business insurance policies to boost your small business. If you have additional questions about business insurance, contact the experts at First Insurance Solutions today. We are eager to help you with all of your coverage needs.