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An Overview of Business Insurance Plans

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Find out what coverage your business shouldn't be without

According to a recent study by the Small Business Administration there are about 29.6 million U.S.-based small businesses, 52 percent of which are home-based. The owners of these small businesses enjoy the advantages of flexibility, few (if any) employees and significant independence. Unfortunately, many small-business owners make the expensive mistake of neglecting to buy insurance policies, a move that can leave them vulnerable to losses and liabilities.

All businesses, no matter how small or how remote their office space, need to have insurance to protect their property, preserve their assets and better their chances of having a successful financial future. Here are some general types of insurance you should consider for your business:

General Liability

Lawsuits can destroy everything you've worked so hard for. Whenever you deal with the public, either by providing a product to clients or as a broker between another business and its end users, you are exposed to liabilities. Liabilities can consist of physical accidents that take place on your property, income or investments based on an error, poorly made products, or misunderstandings. General liability insurance protects against these issues and prevents your business from suffering the financial consequences of a mistake.

Professional Liability

If you are considered an expert in a particular field and your business is relied upon to provide advice, guidance or specialized care, then you may need a professional liability insurance policy to protect you against the result of malpractice or errors and omissions. Businesses in the financial, legal or medical fields require this type of "errors and omissions" coverage to protect themselves.

Commercial Property

Running a business often involves property that can be damaged. From computers to office furniture, your company has invested money in the physical space that provides much of your ability to help you create a profit. If your commercial property is damaged or stolen, home insurance may not cover the loss but commercial property insurance can.

Workers' Compensation

If you have a certain number of employees, your state will require you to carry workers' compensation insurance to pay for the lost wages of an employee who is injured on the job. If you have fewer employees than your state's threshold, you won't be required to hold this form of insurance, but consider the potential liability you could face if one of your employees is injured at work and you don't have coverage. Even something as seemingly safe as an office job could result in repetitive use injuries or falls that may in turn force you to pay partial wages.

Commercial Auto

If you use personal or business automobiles to run company errands, to transport client property or to deliver goods, then you need a commercial auto insurance policy. Personal auto policies don't cover accidents that occur while your vehicle is being used for business purposes.

Running a business, no matter how small, is difficult. It takes a certain entrepreneurial spirit and a little bit of risk taking in order to be successful. Risk takers, however, don't have to leave themselves completely exposed. Instead, cover what hazards you can with business insurance and help ensure that your company is still up and running well into the future.

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