OneInsure Blog
Post By Joan
What Type of Insurance Should I Get As An Entrepreneur?
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Business Insurance, Property Insurance
Being an entrepreneur sounds very thrilling, but the life of an entrepreneur is not as easy as it appears. When an entrepreneur begins jotting down the business plan, the individual is fully aware of the many hardships s/he will have to undergo. In order to protect the business assets of an entrepreneur, insurance companies have designed various kinds of business insurance policies.
Here is a look at 7 insurance policies that every entrepreneur must have to ensure that their business is properly protected.
- Property Insurance
Commercial property insurance protects the building your company owns or leases in addition to your business property, like inventory, furniture etc. It will cover loss and damage to company property due to fire, theft, smoke, vandalism, and other covered events. While buying property insurance make sure you have purchased enough to be adequately protected. A typical policy generally provides replacement cost value or actual cash value for your building as well as your business property.
- Business Interruption Insurance
A business interruption insurance cover will compensate you for loss of income if your company has to vacate the premises on account of some disaster-related damage. The difference between property insurance and business interruption insurance is that property insurance covers physical damages to your property, while business interruption insurance covers the profits you would have made if your company was operating as usual.
- Keyman Insurance
Every company will have a few very valuable employees who contribute greatly to the running and growth of the business. So it only makes sense to take an insurance cover against the unfortunate event of their untimely demise. Here, the proposer and the premium payer is the company, and the life to be insured is that of the key employee. In the event of the demise of the employee, the benefits will be paid out to the company. It must be noted that keyman can only be term life cover. It is worth noting that most of the time this policy is chosen for C-Level Executives, who also own a share in the company.
- Professional Liability Insurance
A professional liability insurance, also known as errors and omissions insurance, is a kind of liability insurance that protects the entrepreneur from professional risks and its related legal expenses. If your company is in the business of providing some kind of professional services there is always the risk you could get sued if unknowingly you give improper advice or make the wrong recommendation. Hence, the wise thing to do here is safeguard yourself with a professional liability insurance cover.
- Commercial Auto Insurance
If you use any vehicle in the operation of your business, it must be included in your commercial auto insurance policy. Personal motor insurance policies will not cover vehicles that are used for business purposes. When you have a commercial auto policy, the insurance company will pay for bodily harm or property damage suffered by others on account of the operation of your business vehicle up to the policy limits. You may be allowed to customize a commercial auto insurance to fit your needs like paying to replace a vehicle that has been completely damaged in an accident.
- Workmen Compensation Insurance
A workmen compensation insurance policy covers the entrepreneur against lawsuits and compensation payouts in the event any worker suffers bodily injury or passes away while in the policyholder's immediate service. This kind of insurance provides wage replacement as well as medical benefits to workers who are injured while working. As an entrepreneur, it is very important you have workmen compensation insurance since it protects you and your business from legal complications.
- Employer-employee Insurance
Employer-employee insurance policy is kind of like a reward program for the employee. Here, the firm buys the cover and the beneficiary is the employee. The employer-employee insurance is not to be confused with keyman insurance. In case of employer-employee insurance, the employee stands to receive the benefits, which is tax free, whereas under keyman insurance, the benefits are paid out to the company in the event of the demise of the key employee. The advantage of employer-employee insurance is that the employee gets the benefits of the insurance cover without paying for the same. This in turn helps the company bring down attrition and promote employee satisfaction.
Use Married Woman Property Act to safeguard your family's future
In case the entrepreneur happens to be a married man, he needs to ensure that his life insurance policy, which he must have, is under the Married Woman Property Act. If the entrepreneur passes away while still having debts against his name, the lending institution can liquidate the assets of his business to recover the amount. It is to protect the financial interest of the family that you, the entrepreneur, need to make sure that the life insurance policy is taken under taken under the Married Woman Property Act. In case of your demise, the policy proceeds will not go to anybody else other than the beneficiaries named in the policy. This way, your family is financially secured even after you are gone.
The Take
When you buy any kind of business insurance policy, ensure that you are making a fully informed decision by reading through the policy details and the list of exclusions. On understanding the basics as well as what the product has to offer, you can put forth the right questions to your insurance provider. Do not risk operating your business without insurance. It is not just your business that will suffer, your family and dear ones can be impacted when you don’t have these policies in place.
