Entrepreneurs contribute a significant portion of the United States GDP. However, the U.S labor of statistics estimates that approximately 45% of new businesses close in the first five years.
The high rate of new business failure can be partly attributed to enormous risks and an unpredictable business environment.
Setting an operations strategy, and preparing for unforeseen circumstances is crucial.
Remember, you can experience theft, natural disaster, financial risk, lawsuits, or general interruptions at any time.
Therefore, it’s prudent to acquire business insurance as part of your risk management strategy.
Here are a few insurance plans to get for your new business.
General liability insurance covers the claims or costs resulting from bodily injury, property damage, reputational harm, or advertising claims against your business.
The above claims can cripple a business operation or bankrupt it.
Typically, general liability insurance pays parties outside the business.
For example, the replacement or repair costs of a property belonging to an adjacent business owner.
Any business that provides services should consider professional liability insurance.
This coverage protects players in the service industry against malpractice, errors, omissions, and negligence in the line of duty.
Here are service providers that should consider professional liability insurance:
Moreover, new businesses should consider this policy to protect themselves against missed deadlines, incomplete work, or breach of contract.
Business income insurance is also known as business interruption insurance.
It covers lost income due to property damage or interruptions, covered by the policy that hampers operations.
In certain circumstances, business income insurance offers financial assistance to cover salaries, rent, and overheads.
You can buy this coverage alongside professional liability insurance, and general liability insurance, among others, under Business Owners Policy.
Effectively, your business gets more value for less.
Like most add-ons, business income insurance complements general liability coverage.
For instance, if a fire damages business premises, business income insurance protects your firm against the loss of income.
On the other hand, commercial property insurance will cover the cost of damages and repairs.
Here are examples of expenses covered by this policy
Commercial property insurance protects commercial property against fire, wind, hailstorms, civil unrest, and natural disaster. Some of the properties that business owners should consider insuring include:
Insurance companies consider external risks like the weather while calculating insurance premiums. For instance, some California-based businesses have an existential threat of wildfires, a critical factor in calculating premiums.
It takes hard work, resilience, and sacrifice to build a successful business. Unfortunately, external shocks or risks can kill your business.