Business Insurance: What Kinds of Insurance Does My Business Need?

Starting a business can be overwhelming because there are so many details to make sure you get right. One of those details is business insurance. Picking the right insurance might be a headache at first but once you’ve got it, insurance can prevent many more headaches down the road. Here’s what you need to know to make sure you make the right decisions for your business’ insurance.

Business insurance has similarities to personal insurance, but there are several different kinds of insurance your business can purchase. Like personal property, home and renter’s insurance, you can purchase insurance policies that protect your business property or rental. Similarly, like your personal car insurance, you can purchase commercial auto insurance for your company vehicles and employees. These coverage amounts will vary with the type of business, the type of property, the assets involved, and the extent of coverage that you need.

Business Insurance

A major difference between business insurance and personal insurance is the breadth of insurance policies that businesses can purchase. Part of the reason for this discrepancy is due to the fact that many business policies cover liabilities. In other words, business insurance policies cover your business for damages or injuries caused to other people in the course of business. For instance, if a client slips and falls at your office, your business’ general liability insurance should protect the business from the client’s claims of injury. General liability is the most basic type of business insurance and nearly all businesses should have general liability insurance.

There are varying levels and types of liability insurance. Professional liability coverage, also known as errors and omissions (or “E&O”), protects you from mistakes made during the course of business. For instance, this kind of coverage protects businesses from their employees’ negligence. In an increasingly litigious environment, this kind of insurance is becoming the norm. Considering this increasing probability of litigation, it’s also important to make sure that your business is protected from having to pay legal fees for defensing claims even where no negligence or mistake has occurred.

Business owners’ policies (“BOPs”) are policies that include general liability insurance and also property insurance for business equipment. This is wise to have for any equipment or tools used in the course of business. Equipment is a broad term that can cover everything from basic office supplies and furniture to computers and heavy machinery. Thus, even in an office environment, it might be beneficial to get a business owners’ policy to cover damage or loss of expensive assets like computers.

Worker’s Compensation

Workers compensation insurance is required by Colorado law for all businesses with employees and protects businesses from the medical expenses of any employee injured on the job. The construction industry in particular has additional requirements for workers comp which other industries are not subject to. Often, this type of insurance helps avoid lawsuits. At a bare minimum, having this required insurance prevents businesses from getting fines from the state.

In many industries, and the construction industry in particular, it is commonplace to require other businesses to have certain coverages in place before entering into contracts with those businesses. Sometimes certain coverage requirements are put in place. Other times, specific insurance policies can be purchased temporarily for specific projects or time frames. Working with an insurance broker in those situations is often a great way to make sure there are no gaps in coverage.

How GLO Can Help

If you’re considering starting a business, concerned you may not have the right coverage for your business, or considering entering a contract with particular insurance requirements, the Geraghty Law Office can help you make the right decisions.

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GLO has prepared this blog to provide general information on legal issues that may be of interest. This blog does not provide legal advice for any specific situation and this does not create an attorney-client relationship between any reader and GLO or its attorneys. GLO engages clients only through specific signed fee agreements. GLO does not guarantee any results.

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