Starting a business is not easy; it requires a lot of dedication and perseverance. If we add the factor of being women, some extra pressures may begin to emerge from the shadows. For many women, the dream of being their boss, achieving goals, bringing ideas to life, and forging their paths is a fantasy world they long for, but they know the road is long and will present various obstacles.

To start a business is difficult. You have to start from scratch in absolutely everything, from conducting market research to captivating the public, and also ensuring safety and stability so as not to risk all the hard work invested.

In conclusion, ensuring your business is properly insured is a priority to avoid headaches or losing your capital due to a lawsuit or an unfortunate event that demands a large sum of money before you even start generating profits.

If you own a small business, you’ve likely heard about commercial insurance and its importance. This insurance not only protects your company from various liabilities and risks but also helps ensure compliance with state and local regulations. But before we dive into the different types of insurance necessary to start your business, let’s start from the beginning.

The Importance of Business Insurance

In general terms, insurance is designed to protect both you and your company from risks you cannot handle. To ensure this protection, the insured pays a business insurance premium, without any guarantee of return.

There are several business insurance policies, and choosing the right one(s) can be complicated. Ideally, you should hire an insurance professional or a company that offers specialized advice to guide you through the process, assess your needs, and help you choose the one that suits you best.

The 5 Insurance Policies You Should Get for Your Business

1. Errors and Omissions (E&O)
2. Commercial Property
3. Business Interruption
4. Workers’ Compensation
5. General Liability

Now, let’s look at each one in detail.

Errors and Omissions (E&O)

Professional liability insurance, also known as errors and omissions (E&O) insurance, covers your business against claims of negligence in case of damages resulting from errors or failures in execution.

There is no single policy for professional indemnity insurance. Each business sector has its concerns, which will be defined in a policy tailored to each company.

Commercial Property

Whether your business operates in rented or owned premises, property insurance is essential. This insurance covers equipment, signage, inventory, and furniture in case of fire, storm, or theft.

However, this policy does not cover large-scale destruction events like floods, earthquakes, or hurricanes. If you plan to establish your business in an area prone to such risks, it will be crucial to seek a specific policy for these types of events.

Business Interruption

This insurance is designed for situations caused by disasters or catastrophic events where business operations are interrupted due to force majeure. If something of that magnitude happens, your business will suffer revenue losses because your team cannot work in the office, manufacture products, or hold sales meetings.

This type of insurance is especially applicable to businesses that need a physical location to operate, such as retail stores, restaurants, and factories, compensating them for the loss of income during such events.

Workers’ Compensation

In the U.S., workers’ compensation insurance is mandatory for businesses with employees. This insurance will cover medical treatment, disability benefits, and death benefits in case an employee is injured or dies as a result of work-related activities.

Even if your employees’ work seems low-risk, slip-and-fall injuries or medical conditions that may develop can result in expensive compensation, which could lead to a lawsuit that might cost you your business.

General Liability

General liability insurance protects you and your business from claims of unintentional injuries to other people, employees, customers, and businesses. Unintentional injuries can arise from negligence at any time. These damages include personal injuries such as slander or defamation, as well as physical injuries associated with defective products and operations.

The financial risks associated with this type of liability can include medical expenses, court-awarded damages, and fines. Depending on the business activity and the type of business you have, you may be legally required to have liability insurance. In some cases, liability insurance is required to maintain a professional license.

Liability insurance plans generally do not cover intentional injuries or unmet contractual obligations. It’s a good idea to review what is covered and what isn’t with your insurance advisor and lawyer.

It can help pay for:

• Medical expenses for a customer who was injured at your business.
• The cost of repairing a wall that an employee accidentally damaged while performing their duties at a client’s house.
• Legal costs to defend your business in the event of a lawsuit.
• Damage to your company’s brand reputation.
• Advertising injuries.
• Property damage caused by fire, lightning, or explosions.

You’ve likely realized how many risks your business or company faces, and unfortunately, many cannot be prevented. It’s a reality that can happen at any time. However, by keeping everything insured, the risks will be minimized, and you’ll feel much more at ease.