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Your business needs protection because the future is uncertain, and the legal system is geared towards the underdog. If you own a restaurant and a customer falls out of a booth or somehow forgets how to walk upstairs, they could initiate a lawsuit against you, and your insurance provider will almost always payout instead of fighting the claim. It is too much hassle not to, and if these cases even make it to court, the judge usually rules in favor of the victim. It’s the way the world goes, which is why insurance and other simple strategies are commonplace today. In some cases, they’re not just common sense – they’re a legal requirement.
Worker’s Compensation Insurance
In many places throughout Canada and the United States, it is a compulsory legal requirement to have worker’s compensation insurance before even starting a business. Needing it, however, does not mean that you cannot shop around to find a better, more comprehensive, or budget-friendly alternative. In many cases bundling insurances together with a single provider can make you eligible for a discount.
General Liability Insurance
General liability insurance for small business is the only thing that is going to keep you away from bankruptcy if even just one person is hurt due to your business. You don’t even have to be negligent to be sued and to lose your case when it comes to general liability. If a customer is injured on your property by an employee or by you, you will need general liability insurance to cover their pay-out.
This pay-out will typically cover the cost of:
- Pain and suffering
- Medical bills
- Non-physical damage (ex: reputation control)
- Loss of income
Professional Liability Insurance
You want to be covered for your work in case of an error. It is important to note that professional liability insurance won’t cover you if you are offering a product. Professional liability insurance is only designed to cover the quality of services rendered. If you sell products, then you will need to also include product liability insurance. You cannot provide quality control on every single item, especially if you have them created in large batches in an overseas warehouse.
Additional Industry-Specific Insurance
Instead of finding individual insurance policies for every aspect of your business, it will often be ideal to find a provider that offers it all and build a bundle with them. That is because there is a lot of insurance coverage you will want, depending on your industry. Contractors might want to invest in pollution insurance or roof insurance on top of the traditional offerings, for example.
Hiring the Right People
Hiring the right people who care about your business and about the quality they provide to your customers is a must. If you require a new position but don’t have the money to cover, an entire salary then outsource. Try to look up who to hire before you outsource, however, so you can vet them in advance. When you hire the right people, you reduce the risk of ever needing to go through your insurance or run damage control.