When an entrepreneur starts a business, he or she is exposed to different kinds of risks. These risks range from financial to general risk. The business people are legally obliged to secure their business by taking business insurance. There are different types of insurance for small businesses. These include:
• General Liability Insurance. Covers all kinds of damages risk in the business, for example, damages done by employees to a third party. Failure of the insurance to cover the damages will require the business to compensate for the costs of claims made against the business for bodily injury or property damage (Boitnott, 2014) .
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• Property Insurance. Covers all the business assets against damage, theft or fire. In case the cover fails, the business assets are at risk of all kinds of damage.
• Business Owner’s Policy (BOP). It is a package plan insurance which contains all the insurance cover that an entrepreneur may require. In case the cover does not work, the business is exposed to risks which were initially covered under the package plan (Kbucci, 2014) .
• Commercial Auto Insurance. It covers the business’s vehicles. Failure of it risks the business vehicles and in case of an accident, the vehicles are not compensated.
• Worker’s Compensation. Provides cover to the business employees against all injury risks at the workplace. Also, they cover the business from being sued. In case of failure of the policy, the business risks being sued due to the occurrence of injury risks to employees within the business (Zellers et al., 1992) .
• Professional Liability Insurance. Covers the business from claims as a result of harm caused by the failure of the business to carry out their services professionally. When the policy fails and in case the business practices unprofessionalism, it risks being sued.
• Directors and Officers Insurance. Protects the senior management of the business if they make decisions which cause a negative impact to the business. Failure of the policy exposes the businesses to court battles in case the management makes wrong decisions (Boitnott, 2014) .
• Data Breach. It covers the business against leakage of business secret information to the public. In case the leaked information spreads to the public and data breach insurance fails, the business data is at risk of reaching unauthorized people.
• Interruption insurance. It covers the business against the risks caused by an occurrence of a disaster or catastrophic event. In case the insurance fails and the risk occurs the business may end up not being compensated (Zellers et al., 1992) .
References
Kbucci. (2014, August 1). 13 Types of Insurance a Small Business Owner Should Have. Retrieved April 29, 2018, from http://www.bucciinsurance.com/2014/08/01/13-types-insurance-small-business-owner/
Small Employers and the Health Insurance Market | Health Affairs. (n.d.). Retrieved April 29, 2018, from https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.13.5.149
The Advantages and Disadvantages of Business Insurance - Understanding Insurance Minimums and Requirements. (n.d.). Retrieved April 29, 2018, from http://snatsenegal.com/2015/04/16/the-advantages-and-disadvantages-of-business-insurance/
Zellers, W. K., McLaughlin, C. G., & Frick, K. D. (1992). Small-Business Health Insurance: Only The Healthy Need Apply. Health Affairs, 11(1), 174–180. https://doi.org/10.1377/hlthaff.11.1.174
