Any business owner knows they must have insurance coverage. But many are confused about what type of coverage they need. And many may not have enough or the right type of coverage for their business. If you do not have the proper business insurance the consequences can be dire.

There are many different types of insurance coverage for business. Each type has different options and coverage levels. There are also different deductible levels and prices.

Property coverage would cover the physical property where the business is located. It also covers the inventory and physical holdings of the business at that location. Casualty coverage covers the business itself and is usually packaged with property coverage. Be aware that property and casualty insurance may not cover every instance of damage and may have certain monetary limitations. It is important to understand the limits of a policy to avoid the potentially devastating results of a disaster. Not understanding your policy can destroy a business and livelihood if an event happens that was not covered by the policy.

Negligence insurance is also important to a business. If a business owner or an employee is sued, this coverage can save the business. It seems like more and more lawsuits are being filed for the smallest things. It is important to have this type of coverage to protect the business from the possibility of lawsuits. The results of an uninsured lawsuit can wipe out a business beyond recovery.

Many business owners may not understand that a personal auto policy does not cover business vehicles. A commercial auto policy will cover business vehicles. The policy is similar to a personal policy and can protect against damages. If a business is dependent on a vehicle, this coverage is necessary to keep the business going in case of vehicle loss or damages.

Workers compensation insurance is another area that if neglected can devastate a business. The consequences of having to pay large sums to an uncovered employee can spell financial ruin for a once thriving company. Most states have some type of compensation system in place. It is the responsibility of the business owner to make sure they understand and participate in workers compensation insurance.

Another type of insurance coverage is business interruption insurance. This insurance can pay for unscheduled interruptions in a business. If a necessary component of the business is unavailable, then this insurance can help cover the loss incurred by the business owner. This can prevent bills being late, and can keep paying the wages of employees during this period of time. This can help a business keep a favorable credit rating when the business is interrupted for a time.

Many companies offer health, life and disability insurance to their employees. While this may be a large expense, it can help a business attract better people. Without this coverage a business may be unable to retain talented, trained employees, and the business can suffer.

Business insurance can be complicated, but it is necessary. Every business owner should understand their policies and the limits. They should also understand the potential damaging consequences if they choose not to have this vital coverage.

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