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Starting a business involves a major learning curve that includes exploring the different types of insurance available. One of the first things you’ll do when you start a company is establish your business type. As a limited liability company (LLC), you can expect to have some protections against financial losses, but it’s important to understand an LLC isn’t the same as having liability insurance. Learning how the two differ can help you understand why you’ll need to purchase commercial insurance that prevents your business from experiencing major losses.
Know Why Setting Up an LLC Can Be Beneficial
A limited liability company benefits you as a business owner by protecting your personal finances in the event of a lawsuit. Sometimes people who feel wronged by a small business may go after the owner’s personal finances if the company doesn’t have enough capital to pay for an injury or other type of claim in a lawsuit. Once you set up an LLC, you can keep your personal and business finances separate so you don’t go bankrupt if a lawsuit results in a settlement with the other party.
Take a Realistic Look at What Can Go Wrong
As a new business owner, you may have high hopes for always providing the best services in your industry. Yet an accounting company can be sued if the client encounters trouble on his or her end for miscalculated taxes or other issues. Or a customer might claim your landscaping company damaged his or her property or hurt someone in the process of trimming tree branches. Since you never know what might happen, it’s important to have insurance coverage in place that covers common problems businesses encounter.
Explore What Liability Insurance Covers
The first thing you’ll want to know is that business and commercial insurance can involve bundling together several different types of coverage. General liability insurance is the most common type of insurance companies need, and this kind covers injuries and property damage that occurs to other people. For instance, liability insurance coverage would cover the costs of medical care for a customer who slips and falls on your property and requires treatment. If someone sues your company, liability insurance can also cover the cost of legal fees along with any settlements.
Make Sure You Have the Right Types of Insurance
Liability insurance is only one kind of insurance that can protect your company from major financial obligations. You may also want to purchase property insurance that covers your company’s physical assets in the event they get damaged. Commercial property insurance works a lot like homeowners insurance to cover expensive equipment, furniture, and other items in case they need to be repaired or replaced after an unforeseen event causes them harm.
Workers’ compensation insurance, auto insurance, and errors and omissions insurance are a few more types to consider purchasing. Talking to your insurance company about your business and the potential risks that could impact it helps you select policies that secure your business’s financial standing.
Business owners need to make sure they protect their companies, customers, and employees by purchasing the right insurance coverage. For affordable, reliable commercial insurance as well as homeowners, renters, motorcycle, and car insurance, National City residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today to learn how we can satisfy all your insurance needs.