Entrepreneurs are natural risk-takers. However, some risks are simply unnecessary. Disruptions to your small or medium-sized business may seem unavoidable, but you can minimize the damage with a little research and preparation.
For most disruptions, borrowing a little cash from an established financial firm like Cash Stop should help tide you over. For other disruptions, your business needs the appropriate insurance policy. Here are five types of insurance you should consider:
1. Professional liability
Sometimes called the errors and omissions (E&O) insurance policy, professional liability insurance covers you from claims that are rooted in professional mistakes. A small error in the paperwork or bugs in the code of a new piece of software could cause financial harm to your clients. Since there’s no way to prevent errors completely, this cover is an absolute necessity.
2. Property Insurance
If your business depends on the goods stored in a warehouse or the value of a certain property, protecting that should be your top priority. Property insurance ensures that your business is covered for any losses arising from natural calamities, fires, or theft. For capital-intensive businesses like restaurants and equipment manufacturers, this is the best policy to sign up for.
3. Workers’ Compensation
Workers’ Compensation claims could be as high as 2.75% of your annual payroll in certain states. That’s a heavy price for any business, regardless of scale. The reason these claims are so high is because the payout for seemingly low-risk injuries (such as carpal tunnel syndrome) could result in hefty payouts. Ideally, you should sign up for workers’ compensation insurance as soon as you start hiring your first few employees.
4. Cyber insurance policy
Cyber threats and data security are swiftly becoming critical issues for corporations. After the recent Cambridge Analytica/ Facebook data scandal, the European Union’s strict GDPR rules could have an impact on your business if your clients are located in Europe. Regulations on client data handling are expected to become a lot tighter over the next decade. Protect your business with the right cyber insurance policy that covers data breaches, identity theft, and professional hacking attacks on your client data.
5. Product Liability
If you sell physical products, your business needs product liability insurance. Even the most benign product could cause accidental harm. Product liability insurance is a highly customizable policy that protects your firm from claims of this nature. This sort of cover is necessary even if your company has taken all the precautions and followed all regional standards while manufacturing the product.
Mitigating risk and limiting the downside is just good business. If you’re starting up a new venture, hiring new employees, or manufacturing products for the first time, speak to a professional to see if you can get affordable and comprehensive insurance coverage.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.