Going into business for yourself can be an exciting way to generate income for your family. In order to ensure that your new business enjoys full protection, you will need to purchase a comprehensive insurance policy.
There are many insurance options available to new business owners and determining which types of coverage you need can be a challenge. Take the time to consider the following factors when investing in insurance so that your new business will be fully protected in the future.
Some types of insurance coverage you invest in will help to provide you with financial protection in the face of legal obligations. Your state might require workers' compensation coverage if you are employing anyone outside your family. Your landlord might require a general liability policy to offset the cost of any damages if you are renting a commercial space for your business.
Knowing your legal obligations can help guide you toward the insurance policies that will offer your new business the most protection over time.
The industry in which you plan to operate can also be an influencing factor when it comes to investing in insurance. Some industries are more prone to certain risks than others. For example, an accountant who handles the financial holdings of clients can be sued if a mistake is made when filing taxes or balancing budgets.
On the other hand, a catering company needs to be more concerned with potential cases of food poisoning. If you work in a service-based industry, then professional liability insurance will be required to protect your financial assets. If you provide a product for your customers, then you will need product liability insurance instead.
It's important that you are realistic about your company's financial position before you invest in business insurance. Insurance products are designed to guard against financial loss. You will be required to pay a monthly premium for each policy, and you will select a deductible that must be met before the insurance company will pay out on a claim.
It can be tempting to select a policy with a high deductible to keep your monthly expenditures low. If your company has a fair amount of liquid assets, this might not be a bad option. If your money is tied up in capital and investments, you might not have the funds needed to meet a high deductible.
Use your company's financial standing as a guide when selecting a business insurance policy. Contact a company like Insurance Unlimited today for more information and assistance.