The first time you rent a commercial space for your small business, it’s equal parts exciting and terrifying. How much space will you really need, and is the landlord open to negotiations? You need to keep yourself, your business and your employees protected, too. Insurance is a huge part of a successful business, and it needs to be in place well before the doors open.
Exactly what kind of insurance does your business need? That depends on the type of business, the type of space and just how much safeguarding you need. There are nearly endless options to choose from, and working with an attorney is the best way to get peace of mind.
Here’s a look at some of the most common insurance policies to protect yourself and your company.
Any business that provides a service, such as rehab facilities or a massage technician needs to have professional liability insurance. What happens if a client claims they were hurt because of the service? It doesn’t matter if you know your services are flawless — upset customers can go to extreme lengths in the name of “justice.” Without the right coverage, you’ll be facing a legal battle that can bankrupt you.
Another issue is meeting with clients, even if there’s no service involved. Some people opt for home offices to save money, but this is a legal minefield. What happens if someone trips on the stairs or otherwise gets hurt on your property? Homeowners insurance doesn’t always cover damages caused during a professional meeting, so the alleged victim might have a winning case against both you and your business.
In the Office
Commercial general liability (CGL) coverage is required when leasing a commercial space. A good landlord will require it, so be wary of one who seems a little too laid back. CGL keeps everyone protected from employees to customers as well as the property and business. However, CGL doesn’t necessarily cover natural disasters, but these can be added on for a nominal fee.
One look at Superstorm Sandy is proof enough business owners need natural disaster coverage. From floods to earthquakes, play it safe since the amount is usually just a few extra dollars. You’re likely required to have worker’s compensation coverage for each employee as well as disability coverage.
The Bells and Whistles
You may want to invest in product liability insurance if your company produces items for sale or lease. Environmental and pollution insurance is also a smart move, just in case an extreme green groups comes after you (this is especially crucial for manufacturers).
Most business owners have a lot of policies, but they can be packaged together as a Business Owner’s Policy (BOP). You might even score a discount when combining them. Always shop around for the best coverage, and remember that legal protection starts with the right paperwork.