You better have these Insurance Policies before you start?

According to the Bureau of Labor and Statistics there were more than 600,000 small business started in 2015 representing more than 4 million jobs throughout the United States. These numbers represent an enormous amount of the economy in our country. When small businesses are formed, there is a lot of up-front costs that many entrepreneurs do not expect. Commercial insurance is one of those costs that make up a lot of the costs to get a start-up of the ground. For this reason, many small business owners attempt to skimp on the amount of insurance they purchase while their business is getting started. There are certain policies that most small businesses simply cannot do without. Here are three policies that all business owners should strongly consider purchasing.

General Liability

General Liability Insurance is required by law in most states for most industries. It is the first line of defense a business has when damage is done to third parties. A standard commercial general liability insurance policy will cover the business for claims against it from bodily injury and property damage that occurs because of the actions of the business. These claims can be as simple as someone slipping on a wet floor while walking through a restaurant or they may be damage to someone’s car because the sign falls on top of their car in your buildings parking lot. One thing to always keep in mind when purchasing this coverage is that it is not all encompassing. There are many limitations and exceptions to a general liability policy. It is important to talk long and honestly with your insurance agent about your business and the risks you face.

Workers Compensation

Workers’ Compensation Insurance is the second insurance policy that is required by law for most businesses in most states. Many people refer to the workers compensation systems as the ‘exclusive remedy’. This is because the basic purpose of Workers’ Compensation Insurance is to assure injured workers get medical care and compensation for a portion of the income they lose while they are unable to work as a result of injuries sustained on the job, but also because employers benefit from the fact they cannot be sued for most injuries that occur as a part of normal business practices. In a workers compensation system, workers give up the right to sue employers for injuries that occur as a part of normal business practices. Injured workers can sue employers if there is some form of negligence on the part of the employer.

Employment Practices Liability Insurance (EPLI)

Employment related lawsuits have risen substantially over the course of the previous decade. For this reason, it is extremely important for all small business owners to consider purchasing Employment Practices Liability Insurance (EPLI). EPLI is a form of professional liability insurance designed to specifically address the unique risks associated with hiring, employing, and terminating employees. This policy can act as a safeguard for employers in today’s litigious society. This is because it provides legal protection for the business, the owners, the officers, the directors, and the other employees in the event an employee sues for employment related reasons. The reason for the lawsuit does not have to be founded and your business does not have to be found guilty for the lawsuit to result in an enormous cost to your business.  This costs can rack up from the legal fees you incur to prove your innocence, the time spent away from work in court proceeding, and the time and energy it takes to repair the image to the business. Some or all of these costs can be lightened if you purchase an employment practices liability insurance policy.


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