The LLC is an increasingly popular type of business organizational structure that functions as a hybrid—it offers more protection than a sole proprietorship but is less complicated and cheaper to set up than a corporation. Once new business owners have set up their LLCs, they may be wondering what kind of insurance they need to protect their new entities. The following is an outline of the most popular and, occasionally, necessary types of business insurance for LLCs.
Workers’ Compensation Insurance
If your LLC is going to have employees, you may be legally obligated to carry workers’ compensation insurance. This type of insurance covers the costs when employees are injured at work. Aside from being required, workers’ compensation insurance is needed to take care of your employees’ health so they’ll continue to be valuable assets for your business.
Commercial Vehicle Insurance
If your business owns and operates a vehicle, it’ll need to be properly insured as well. Motor vehicles are legally required to be registered and insured, and a vehicle used for commercial purposes is no different. It’s usually in your best interests to carry more coverage than the legally required minimum to sufficiently protect your business in the case of an accident.
General Liability Insurance
General liability insurance isn’t usually legally required, but you probably do need it. This type of insurance protects a company’s assets against legal liability and pays for court costs, settlements, and awarded damages. A common scenario is a customer being injured at a place of business. It also usually protects against intellectual property lawsuits and claims for false advertising.
If you’re going to lease or own a building for your company’s use, you’ll likely need property insurance. This insurance covers the physical building and its contents in the event of break-ins, fires, and more. Flood and earthquake insurance aren’t usually included in these plans, so if your business is located in an area prone to these disasters, you’ll likely need to buy additional coverage.
Specialized Types of Business Insurance
Depending on your industry, you may want to have specialized types of business insurance. For example, errors and omissions insurance is a type of specialized liability insurance that protects service-based businesses from losses due to innocent mistakes, and it’s commonly purchased by accounting, consulting, and insurance firms. Cyber liability insurance is useful for tech companies and companies working in e-commerce to guard against damages from data breaches, cybersecurity attacks, and other similar hazards.
If you have an LLC, you need to make sure to protect your business and your employees by purchasing the right insurance coverage. For affordable, reliable business insurance as well as homeowners, renters, motorcycle, and auto insurance, call on the trustworthy professionals at Altra Insurance Services. Reach out to us today at 619-474-6666 to learn how we can satisfy all your insurance needs.