No small business owner wants to add to their annual bills, but that’s exactly what could happen if you don’t take out the right insurance policy.
Small companies can be hit hardest when it comes to handling claims. You can’t afford a top legal team and you may not have the capital to pay any settlements.
You can prevent damage to your reputation and make sure your business avoids bankruptcy by choosing various insurance policies to cover most situations.
If you think these types of insurance claims couldn’t happen to your business, keep reading. Think about what you’d do if you had no insurance and someone made one of these claims against your company.
Types of Insurance Claims Your Business Could Face
These are the most common external and internal claims that affect small businesses — and the insurance types that’ll protect you from financial destruction in each case.
1. Fire or Property Damage
Fire and property damage claims aren’t just about replacing what has been lost or broken in the incident.
You need to consider your business continuity too. A fire that takes over your warehouse, for example, could eradicate your stock and affect deliveries to customers.
A combination of property insurance and business continuity coverage will protect you from losing your customers, your reputation, and your company.
2. Fleet Accidents
It doesn’t matter if your fleet is one vehicle or one hundred: auto accidents should be on your radar as potential money pits for claims.
Make sure your fleet insurance covers any claims for injury to your staff or any third party involved in an accident.
3. Injury or Personal Accident
If someone falls down the stairs to your office, you’re liable for it. Or, if one of your staff develops a long-term illness directly caused by their role, you’re facing a huge bill in court.
A personal injury attorney is the best person to handle any complaints you receive about trips, falls, or other incidents on your business premises. Your business liability insurance will cover the legal costs involved in resolving injury and personal accident claims.
4. Data Breach or Cyber Damage
A digital world translates to higher chances of cybercrime. When your network is breached, you risk breaking confidentiality and data protection laws, not to the mention the potential loss of business service.
Digital insurance policies can protect you against data protection claims and also help cover the costs incurred due to malicious hackers.
5. Professional Errors and Omissions
Whether you sell a physical product or a professional service, you need to make sure everything you do is accurate.
However, humans make mistakes. If you fail to deliver on a contract or you manufacture a faulty product, your customers can take you through the legal system for huge sums of money.
Professional indemnity insurance, also known as errors and omissions coverage, provides cover against potential legal costs in such cases.
Are You on the Right Side of the Law?
Some business insurance types are a legal requirement to operate your company. Others are optional, but can you afford to risk facing the types of insurance claims above?
There are many ways the law can catch you out. From false advertising to inadvertent hiring discrimination, your business is at risk of claims from a huge range of avenues.
Make sure you’re operating on the right side of the law. This helpful guide will walk you through potential legal minefields and show you how to avoid them.