March 24, 2021 | Blog Post No.23

Types Of Insurance A Small Business Should Have

Posted By: Admin_news

In This Blog

What Types Of Insurance Do I Need For My Small Business?

Types Of Insurance A Small Business Should Have

1. General Liability Insurance

2. Workers Compensation

3. Property Insurance

4. Business Owners Policy

5. Commercial Auto Insurance

6. Professional Liability Insurance / Errors and Omission

7. Directors And Officers Insurance

8.Data Breach

9. Product Liability Insurance

10. Business Interruption Insurance

There are certain types of insurance a small business should have in California. From the day an individual starts his own business — he probably knows that he exposes himself to certain kinds of risks. One lawsuit from a third party person due to the liability of the business, could probably wipe-out the hard-earned company. Besides, catastrophic events could also make a massive impact on the financial status of the business. It will be difficult for small businesses to get off the ground if a catastrophe happens — making it more essential to purchase a particular type of small business insurance. Small business insurance is a type of insurance that covers small businesses against inevitable losses that could arise during their policy period. Here is a list of insurance services small business owners must-have.

Types Of Insurance A Small Business Should Have

1. General Liability Insurance

General Liability insurance is one of the types of insurance a small business owner must-have. Generally, This covers the liability of the insured against a third party person. It covers bodily injury and property damages the small business caused to others. Furthermore, general liability insurance would cover the insured against legal claims a third party person files against the insured business owner.

Coverage A: Bodily Injury and Property Damages Liability

This coverage protects from losses that are due to the insured’s legal obligation to a third party person. This loss causes bodily injury and property damages to others arising out of the insured’s business operations and negligence. Also, emotional distress can be considered a bodily injury.

Coverage B: Personal And Advertising Injury

Personal and advertising injury coverage could protect the insured against legal claims arising out of specific offenses, such as:

  • Invasion of a third party person’s privacy
  • Defamation
  • Libel
  • Slander
  • False Arrest
  • Copyright Infringement

Coverage C: Medical Payments

This coverage provides payments for first aid and other necessary medical treatment to the injured third party. Besides, it can also cover the ambulance fee, care provider fee, and until the extent of a funeral. These medical payments coverage intends to provide basic pay for the injured, in the exchange of the injured, not filing a legal claim against the insured.

2. Workers Compensation

Workers’ compensation is a type of insurance that could protect business owners against losses due to their workers. This insurance can provide four types of benefits to the workers. Including the rehabilitation of the workers, the cost for its injury that arises during their employment period. Besides, it can also cover the worker’s diseases that occur in relation to their work and their operation.

Key Takeaways

  • Workers’ compensation is the mandatory insurance for all business owners throughout California.
  • Covered injuries of the workers must arise during his employment with the insured business.

Benefits Of Workers Compensation

A. Medical Coverage

This coverage provides care provider expenses for unintentional accident injuries. Besides, it can also cover medical costs resulting from diseases due to the field of work. Medical expenses can cover the full cost of the employee’s medical fees — but under a specific amount of time only. Workers’ compensation insurance does not have deductibles and coinsurance; this is to prevent the insured from demanding medical services.

B. Income Replacement Coverage (Indemnity Benefits)

In worker’s compensation law, the insurance company must provide weekly income to the disabled worker. Income replacement coverage is only applicable if the disability of the worker results from the injury due to work operation.

C. Survivors Benefits

Suppose that the worker’s death is work-related, the jurisdiction will automatically provide income benefits to the surviving family members. This survivor’s benefit includes the priority, which is the surviving legal spouse and its dependent children. Besides, it can also provide for the cost of funeral services or burial benefits. In thirty jurisdictions, 66 percent of the workers’ average weekly wage, would be the benefit that has to give, to the surviving spouse and its dependents.

D. Rehabilitation

Many workers suffer a disability that is beyond income payments and ordinary medical services. Other patients require other help to bring them back to their former economic and social state. Rehabilitation to the workers includes physical-medical attention or therapy, to restore the worker to their health, antecedent to the injury. Besides, it can also provide psychological assistance to the worker if the worker suffers from mental trauma due to the injury. Workers’ compensation can also provide payment for the enrollment of the worker to a vocational course. It is a training for the worker to fit in a new function, in accordance with his current state.

3. Property Insurance

This insurance is a type of insurance that can cover the property of the business against covered losses. It can cover the building of the business and the properties that are attached to it. Besides, it can also cover the personal properties that are inside the building premises.

It can also cover the properties that are used in the business — even though it is outside the building. Also, the business properties within the 100 feet parameters of the structure of the business can be covered.

Benefits Of Workers Compensation

A. Building

  • The building structure of the business that is described on the declarations of the insured. It includes the following:
  • Completed additions
  • Permanently installed machinery and equipment
  • Indoor fixtures and outdoor fixtures

B. Personal Property Of The Business

  • Located inside or outside the building of the business insured. It can also cover the personal properties that are located within the 100 feet parameters of the building. Consisting of the following unless otherwise listed on the declarations.
  • Furniture and fixtures
  • Machinery
  • Business Stocks
  • Other properties
  • Leased or personal property for which the insured has a contractual responsibility

4. Business Owners Policy

Business insurance policy could cover small to medium-sized businesses. This insurance is a package policy that can encompass both the business properties and its liability.

Coverage Of Business Owners Policy

A. Property Coverage

Property coverage could cover the building of the insured’s business against covered losses. Besides, it can also include the personal properties of the insured that are useful in business operations.

B. Liability Coverage

This coverage would cover the business of the insured against bodily injury and property damages claims. The coverage will be applicable if the liability claims arise inside the premises of the company and its operations. It could cover the insured from the cost of settling claims and the cost of medical expenses.

5. Commercial Auto Insurance

This type of insurance could cover the vehicles of insured businesses against unexpected losses. Commercial auto insurance could cover the company against liability claims arising from a third party person. It can also include the insured business vehicle from collision and comprehensive damages.

Coverage Of Commercial Auto Insurance

A. Collision Coverage

Property coverage could cover the building of the insured’s business against covered losses. Besides, it can also include the personal properties of the insured that are useful in business operations.

B. Comprehensive Coverage

This coverage would cover the business of the insured against bodily injury and property damages claims. The coverage will be applicable if the liability claims arise inside the premises of the company and its operations. It could cover the insured from the cost of settling claims and the cost of medical expenses.

C. Medical Payments

Medical payments coverage is optional in some states. Some drivers consider it unnecessary if they have overlapping Health Insurance. However, it is more secure if the business adds this coverage to their policy. Medical payments coverage could pay the medical expenses of the driver — should he procures an accident while working for the insured business.

D. Liability Coverage

Liability coverage could pay for the liability of the insured to a third party person if the insured is held at-fault on the accident. It could pay for bodily injury and personal property damages the insured caused to others. Besides, liability coverage could also defend the insured against legal claims related to these damages.

E. Uninsured Motorist Coverage / Underinsured Motorist Coverage

Uninsured coverage pays for the bodily injuries of the insured that is due to an accident with another vehicle whose driver is negligent. Besides, the driver at fault has no liability insurance or if the insured was hit-and-run by the other driver. It can cover the driver of the business and anyone who is riding inside the insured vehicle. While underinsured coverage would fill the gap when the party at fault doesn’t have enough liability insurance to cover the insured.

6. Professional Liability Insurance / Errors and Omission

Professional liability is a type of insurance that is also known as errors and omissions, which is insurance that can cover the liability of professionals. However, they are covering different types of practices. Professional liability insurance would cover the liability of professionals whose job is to advise clients. This business includes medical professionals and legal professionals.

On the other hand, errors and omissions cover the liability of business professionals whose job includes selling products. These businesses include insurance brokers, insurance agents, real estate brokers, and architects.

7. Directors And Officers Insurance

Directors and officers liability insurance would cover the liability of directors and officers of the company. D&O can indemnify the insured for the losses that could arise from alleged wrongful acts, until the stretch of their capacity. This insurance could extend up to the defense cost and investigations. However, illegal intentional acts are typically not covered by this insurance. Besides, this could prevent other officers of the company from filing a legal claim against the director of the company.

8. Data Breach

Professional liability is a type of insurance that is also known as errors and omissions, which is insurance that can cover the liability of professionals. However, they are covering different types of practices. Professional liability insurance would cover the liability of professionals whose job is to advise clients. This business includes medical professionals and legal professionals.

On the other hand, errors and omissions cover the liability of business professionals whose job includes selling products. These businesses include insurance brokers, insurance agents, real estate brokers, and architects.

9. Product Liability Insurance

Professional liability is a type of insurance that is also known as errors and omissions, which is insurance that can cover the liability of professionals. However, they are covering different types of practices. Professional liability insurance would cover the liability of professionals whose job is to advise clients. This business includes medical professionals and legal professionals.

On the other hand, errors and omissions cover the liability of business professionals whose job includes selling products. These businesses include insurance brokers, insurance agents, real estate brokers, and architects.

10. Business Interruption Insurance

Professional liability is a type of insurance that is also known as errors and omissions, which is insurance that can cover the liability of professionals. However, they are covering different types of practices. Professional liability insurance would cover the liability of professionals whose job is to advise clients. This business includes medical professionals and legal professionals.

On the other hand, errors and omissions cover the liability of business professionals whose job includes selling products. These businesses include insurance brokers, insurance agents, real estate brokers, and architects.