If you’re running a business, the t’s you need to cross and i’s you need to dot can seem endless, especially if you’re just starting out. But one important box you need to tick is the insurance box. This too, can seem bewildering — it seems like there are so many types of business insurance that you need! But let’s think about it. You need insurance to protect your physical store, should a natural disaster come through or some other unforeseen incident. You need to protect your employees — and also yourself — as well as the merchandise in the store. And depending on what kind of business you run, you may also need vehicle insurance, if you have company owned vehicles or employees delivering or picking up goods on your behalf.

How Does Insurance Work?

The point of insurance is to ensure that you, individuals under your care, and your property and/or possessions are protected in case they’re damaged, lost, or stolen. You may pay a monthly sum to the insurance company for your insurance and some insurance companies may have a premium you need to hit before the insurance kicks in. (Think about medical insurance, for example.)

However, let’s say a fire takes out your business or your store is robbed. If you have property insurance or business interruption insurance, in some cases, your insurance company will help you cover some of the financial loss and you’ll be able to recoup some of your damages. Instead of having to worry about tens of thousands of dollars lost, which can be devastating for any business, insurance can take some of that worry away. It may not cover everything, but it will usually cover a majority.

What Types of Business Insurance Do I Need?

As discussed above, property insurance is definitely one of the types of business insurance that you need to have. It doesn’t matter whether you own the property or are just leasing. If you rent, looking into business renter’s insurance also isn’t a bad idea.

Another very important type of insurance is making sure you have business liability insurance coverage. This helps protect you against any negligence claims in case any injuries arise from a mistake or something not performing. With this type of insurance, you’ll likely want to sit down with your insurance company and make your own unique policy — there’s no one blanket approach that will work for every company.

Workers compensation insurance should also make the short list for what types of business insurance you need. In case an employee gets hurt — or in the worst case scenario, passes away — because of an incident related to his or her job, your business will be protected against a claim.
This is obviously a priority if you’re in a high risk business, dealing with heavy machinery or precarious situations, but even if the work is low-risk (say, an office job), you still need it. Accidents can happen anywhere, and you want to make sure your business is protected.

What Should I Look For in an Insurance Company?

You definitely need to check out the limits of liability when looking at insurance companies. This will tell you how much an insurance company will pay out in a specific event, but also generally for an entire policy period. Check and see how much you’ll be required to pay out of pocket before the insurance kicks in — keep in mind this is called retention for business insurance, not deductible.

You also likely want to go with an insurance company that’s an admitted carrier — meaning that the state insurance department has admitted them to underwrite insurance policies. They have to follow certain regulations to be admitted if it can’t fully handle claims under its own power. In a worst case scenario, this means you could turn to the state for help, if the insurance carrier isn’t following through.

Of anything you do in your business, make sure you have the right kind of insurance. It really does matter and will protect all facets of your business in case the worst happens.