If you are new to the business world, you most likely know about personal types of insurance for your home, apartment, and car, but you may need to learn more about the types of insurance you need when you own a business. What exactly is ‘business insurance’? Business insurance covers your business against losses that may stem from operating your business. Although there are several types of business insurance, be aware that each policy has its own restrictions, stipulations, and coverage limits.
Types of Business Insurance Coverage
Some of the most common types of business insurance include:
General Liability Insurance: Protects your business against liability claims. Liability means “being responsible for something by law.” When you own a business and offer goods and/or services, you are responsible for those goods and services. If harm is brought to someone who purchases your services or products then you may well be responsible for compensating that person for any damages caused. General liability protects your business against such claims as:
- Manufacturing error
- Personal error
- Bodily injury
- Property damage
Product Liability: Product liability insurance will help cover against the following claims due to the use of a faulty product that your business sells or produces:
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Key Person Insurance or Buy/Sell Agreement: This type of insurance covers against the loss of a ‘key person’ in the company. If the company would suffer from the loss of a ‘key person’ within that company if the person died or became disabled and could no longer work, benefits are paid to the company. These benefits can be used to hire and train somebody to replace the ‘key person,’ or to buy the key person’s interest in the business.