As a business owner, it’s important to understand the different types of business insurance available. Without the right coverage, you could be vulnerable to costly lawsuits and damages that could put your business at risk. Here are three types of business insurance and what they typically cover.
General Liability Insurance
General liability insurance is one of the most popular types of business insurance. It’s designed to provide protection from third-party claims of bodily injury, property damage, and personal and advertising injury. It’s important to note that general liability insurance does not cover damages resulting from errors and omissions or professional negligence.
For example, if a customer slips and falls on your premises, general liability insurance would cover their medical expenses. If you’re sued for copyright infringement, general liability insurance would cover your legal expenses.
Product Liability Insurance
Product liability insurance is designed to protect businesses that make, distribute, or sell products. It covers damages resulting from a product defect, unsafe design, or failure to provide adequate warning of potential risks. Product liability insurance can also provide coverage for legal expenses associated with product liability claims.
For example, if a customer sues your business after experiencing an adverse reaction to a product you sold, product liability insurance would cover the legal costs associated with the suit.
Workers’ Compensation Insurance
Workers’ compensation insurance is designed to provide coverage for medical expenses and lost wages for employees injured on the job. It also covers death benefits to family members when a worker is killed on the job. Depending on your state, workers’ compensation insurance may be required for businesses with employees.
For example, if an employee is injured while operating a machine in your factory, workers’ compensation insurance would cover their medical expenses and lost wages. It would also provide death benefits to the employee’s family if the employee was killed in a workplace accident.
Other Types of Business Insurance
In addition to the three types of business insurance listed above, there are other types of insurance that businesses may need. For example, if you own a business that owns vehicles, you may need commercial auto insurance. If you provide professional services, you may need professional liability insurance.
It’s important to understand the different types of business insurance and what they cover. Without the right coverage, you could be vulnerable to costly lawsuits and damages that could put your business at risk. Working with an experienced insurance agent is the best way to make sure you have the right coverage for your business.
