What types of insurance coverage should a small business have in place to protect against possible liabilities?
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Small business owners should consider purchasing several different types of insurance coverage to protect against potential liabilities. Here are some of the most common policies:
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General Liability Insurance: This type of insurance provides coverage for claims that arise from third-party injuries or property damage, and is often required by landlords and lenders. It typically covers things like bodily injury, property damage, libel or slander claims, and personal injury claims.
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Property Insurance: This type of insurance provides coverage for damage or loss to a business's physical assets, such as the building, equipment, inventory, and furnishings. This might include incidents like fire, theft, vandalism, or natural disasters.
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Professional Liability Insurance: This type of insurance, also known as errors and omissions insurance, provides coverage for claims that arise from professional mistakes or negligence. This might include things like a client suing for financial losses resulting from faulty advice or errors in work performed.
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Workers' Compensation Insurance: This type of insurance provides coverage for medical expenses, lost wages, and other benefits for employees who are injured or become ill on the job. Workers' compensation is often required by state law, and failure to carry it can result in steep fines and legal consequences.
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Cyber Liability Insurance: This type of insurance provides coverage for damages and expenses related to cybersecurity breaches, such as data theft or cyber attacks.
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Commercial Auto Insurance: If a business uses vehicles for work purposes, such as deliveries or transporting clients, they should consider purchasing commercial auto insurance to cover accidents and injuries that occur while using those vehicles.
It is important to note that the specific types and amounts of insurance coverage a small business needs may vary depending on factors such as the size of the business, the industry, and the location. Business owners should consult with a licensed insurance broker who can help them assess their risks and customize a policy that fits their needs.
