Insurance Coverage for the Small Business

When you own a small business, it's vital to make sure that you are carrying sufficient insurance coverage. Many small business owners make the mistake of thinking that their company is too small to have to worry about insurance. However, it's a fact that no company is too small to need sufficient insurance coverage. There are several different types of small business insurance that every company should have.

• Workers Compensation Insurance

If your company has employees, you are required to carry workers compensation insurance. As a small business owner, it's important for you to understand that employers are liable for any injuries experienced by employees in the workplace or in the line of duty, regardless of who bears responsibility for the injury. Workers compensation insurance provides protection in the event that employees are injured at work or are stricken with illnesses directly related to their work.

• Liability Insurance

Every business needs to carry a sufficient amount of liability insurance. This type of insurance provides protection against injuries, or claims of injuries, that may be caused by actions of the business. Businesses of all sizes may experience product or service liability claims from customers, employees, and others with who the company has a possibility to impact.

It's important for small business owners to realize that the costs associated with defending a liability complaint, whether or not there is validity to the complaint, can be high enough to put even a successful company out of business No business should try to function without the benefit of liability insurance. Doing so can result in financial ruin for the organization and its owners.

• Property Coverage

No matter what type of business you own, it's likely that you have a certain amount of equipment that you need in order to operate your company. Small businesses typically have computers, furniture, supplies, and other items without which they cannot function. If your company makes or sells any type of product, it's also likely that you have raw materials and/or finished goods in inventory.

It's important to make sure you have sufficient insurance coverage to replace the items you need to operate your business in the event that they are stolen or damaged. No matter how careful you are, there is always a risk of fire, natural disaster, burglary, and other problems that can result in the loss of the basic items you need for your business to function at any level.

You can choose to get the property your business owns insured for either replacement value or depreciated value. Replacement value coverage is more expensive than the alternative, but does ensure that you won't have to worry about whether or not you'll be able to replace the things you need in order for your business to function if you need to do so.

• Business Interruption Insurance

Many business owners overlook the importance of protecting themselves with a business interruption insurance policy. This type of coverage provides revenue protection in the event that your business becomes temporarily unable to function for a period of time as the result of a covered event.

For example, if your business is seriously damaged or destroyed by a fire, you'll have to worry about much more than replacing your damaged equipment. You'll have to continue to meet the financial obligations of your company, yet you won't have any way to generate revenue while your facility is being repaired. Business interruption coverage can provide you with the cash flow you need to stay afloat in the event you experience such a problem.

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