Every business regardless of its scale or scop needs insurance to protect it from any untoward and unfortunate incidents. This is especially true for a small business where owners to not have a huge cache of funds to fall back on to meet emergency liabilities. However, what is important is to know the types of insurance covers that are available and which should be availed almost mandatorily.

Here is a lowdown of types of insurance that you should take out as a small business owner.

General Liability Insurance

This insurance cover protects your business from third part liability and claims. Such claims can arise due to a minor incident but can have a devastating effect on your business. Suppose a client slips on the floor where water had been spilled earlier, her/she can file damages against you. If you do not have General Liability Insurance, the whole amount would have to be paid by you personally or from your business. The consequence can be crippling for a small firm or a business start up. If you own a business that sees heavy customer footfalls in your premises like a retail store, this cover is obligatory for you.

Commercial Property Insurance

While General Property Insurance protects you from third party claims from your customers, Commercial Property Insurance guards your property like buildings, plant and machinery, office equipment and anything else of similar nature. Any untoward incidents like theft or fire is covered by this insurance. For a small business a fire or theft of costly equipment can have a crippling effect. Because of the importance of these two types of policies for a small business owner, many insurers offer a simple Business Owners’ Policy which covers both in a single package.       

Directors & Officers (D&O) Insurance

This policy safeguards your executives, managers, members of the board and authorities in power from being sued by stake holders for negligent decision making that might have adversely affected the company’s functioning. Top ranking officials can sue other directors if they feel that they have been wrongly terminated. Even vendors can file claims against your small business in case of bankruptcy. Without D&O to fall back on the executives and you would have to personally meet the liabilities, putting your own assets to risk. If you want to build up a pool of talented and experienced directors and other key personnel, having D&O insurance will be an added advantage.

Workers Compensation Insurance

Workers Compensation Insurance is mandatory in most States and even otherwise it will be beneficial to opt for this cover. The insurance takes care of medical costs and lost wages if an employee falls ill on the job or is injured. If you are in an industry that is hazardous in nature or has a history of high work related illnesses, you should always consider purchasing this policy. Further, if an employee decides to sue your business for any reason whatsoever, you will be protected with this insurance.

As a small business owner, you will do well to take out required and specific insurance policies so that you can safeguard your personal assets from any liabilities that might crop up.

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