What insurance should you carry for a new business

Choosing the right types of insurance for a new business is crucial to protect against potential risks and financial losses. The specific insurance needs can vary depending on the industry, location, and size of your business, but here are some common types of insurance that many new businesses should consider:

1. General Liability Insurance: This is essential for any business. It protects against claims of bodily injury, property damage, and advertising injury that can occur during business operations.

2. Professional Liability Insurance (Errors and Omissions): Important for businesses that provide services or advice, this insurance covers claims of negligence, misrepresentation, or failure to deliver a service as promised.

3. Property Insurance: This covers loss and damage to your business property due to fires, storms, theft, and other incidents. If you operate from a physical location or have business property (like office equipment, inventory, tools), this insurance is crucial.

4. Workers’ Compensation Insurance: If you have employees, most states will require you to carry this insurance. It covers medical costs and a portion of lost wages for employees who get injured or sick on the job.

5. Business Owner’s Policy (BOP): This typically combines general liability and property insurance at a discounted rate. It may also include business interruption insurance, which covers the loss of income resulting from a fire or other catastrophe that disrupts the operation of the business.

6. Cyber Liability Insurance: If your business handles sensitive customer data (such as credit card numbers, health records, or personal information), this insurance is important to protect against data breaches and cyber-attacks.

7. Commercial Auto Insurance: If you use vehicles for business purposes, whether owned or leased, you will need commercial auto insurance to cover the risks of driving those vehicles.

8. Product Liability Insurance: For businesses that manufacture, distribute, or sell products, this insurance protects against financial loss as a result of a product defect that can cause injury or bodily harm.

9. Directors and Officers Insurance: This type of insurance protects the directors and officers of a company against their actions that affect the profitability or operations of the company. It’s especially important for companies with external investors or large boards.

10. Business Interruption Insurance: This helps cover the loss of income and helps pay expenses if your business has to temporarily close due to a covered cause.

11. Employment Practices Liability Insurance (EPLI): This protects against claims from employees alleging discrimination, wrongful termination, harassment, and other employment-related issues.

When starting a new business, it’s wise to consult with an insurance broker or agent who understands your industry well. They can provide personalized advice and help you find a package that fits your specific needs and budget.