There are the day-to-day dealings that you have to keep track of when running a business. Then there are the obligations behind the scenes that you also need to be aware of. Remember, you’re not only the boss; you’re also the team leader, the new business development planner, and the HR manager (for the time being). Plus, to top it all off, you have to jump through some legal hurdles to make your business legit. That’s right, I’m talking about insurance.
Even though these responsibilities may not be your favorite cup of tea (or anyone’s, really), getting the proper insurance is essential for protecting your business and your employees. As a leader of a CFO outsourcing company, I make sure my team is not just well versed in outsourced controller solutions and strategic and financial planning, but that they know the legal arena as well. And insurance is no joke. But don’t stress. We’ve got a list of the ones that you need to get your business (legally) off the ground.
General Liability Insurance (Commercial General Business Liability)
Liability insurance covers a wide range of claims. From insuring your company’s property, possessions, and assets to covering property damage, medical issues, copyright infringement, compensatory and punitive damages, and legal defense (in the case of litigation), this deal is a pretty robust offering for a pretty fair price. With a median cost between $400 and $600 a year, liability insurance is a good, proactive investment to safeguard against any potential setbacks.
Errors and Omissions Insurance (Professional Liability Insurance)
If you offer a service (which most businesses do), this insurance is for you. Errors and omissions insurance protects you and your business against negligence, malpractice, errors, and “failed” service performance. Some insurance companies also offer coverage for claims or lawsuits by temporary staff and independent contractors. In some cases, this type of insurance can even be customized, catering to your business’s specific needs—that is, if you find the right provider. So do some thorough research before committing to a plan.
Workers’ Compensation Insurance
Do you have full-time employees? In some states, it is required that your business offers workers’ comp. This insurance safeguards your company against accidents that can happen on the job to your employees, including injuries and illnesses. Since each state has different requirements, check out what your state’s authorizations are to make sure you’re covered on all accounts.
As a general rule, your business needs to adhere to the legal guidelines of your state. The three mentioned above are the basics, which can differ in price and coverage depending on what your company provides. Make note that these aren’t the only insurances you should keep on your radar. If you’re selling a product, working from home, or own a piece of property, you may need additional insurance. So make sure to see what the requirements are for your industry, your state, and your business. You know as well as I do: it’s always better to be safe than sorry.