Business insurance is insurance coverage for a business. A business can be insured the same as a house or car. The purpose is to shield a business from anything from hurricanes to political upheaval. A business is always at risk for all types of incidents – could be a lawsuit, faulty product or some other event. Business insurance protects the owner and the company from certain problems.
The short answer is, yes, every business should have insurance. If the business has something to protect, such as assets, intellectual property, investments, and employees, then yes insurance is recommended.
Business insurance is a bit more complex, but similar to other forms of insurance. The insurance pays out under the terms of the policy. The terms of business policies may be created from a template; however, the bigger the company, the more complicated the policy.
As stated earlier, you can create a variety of terms for a business policy. It depends on the business and its needs. Some common terms include:
Business owner policy - A business owner policy is a general policy. It is a one size fits all package for simple businesses with few demands.
Worker's compensation – This package protects employees who are injured on the job. This keeps the employer from having to pay out of pocket for injured employees.
Directors and officers insurance - Directors and officers sometimes need protection against actions that may hurt the profitability of the company.
Data breach – This coverage is for companies that rely on intellectual property. If a data breach occurs, then the insurance provides a form of liability coverage for the business.
The benefit of business insurance is that it can save a business from bankruptcy. Without coverage, a business might not be able to withstand certain incidents – like lawsuits or other threats to the business. Every business owner should have insurance to protect the business and themselves from personal liability.