The manufacturers and retailers of physical goods have pretty clear business insurance requirements. But what if you offer a professional service? You should have a precise idea of the types of covers which you require, how much coverage you will need and how much you can afford to spend. Use this guide to find the answers to these and other important questions.
Even if you have a home-based business and use only a single computer and a mobile phone, you should get business insurance which covers these assets. Keep in mind that since they are used for business purposes your home insurance policy will most probably not cover them.
Generally, you have to cover all equipment and any materials which you use for their replacement cost. If you cover them for their actual value, you may get much smaller compensation because of depreciation. Another important thing is to cover your assets against all possible perils including theft, fire, wind, flood and others. If you provide services on the premises of your clients such as plumbing services, for instance, you have to ensure that your equipment will be covered for damage and theft outside of your office Seattle Plumbing as well.
You should definitely consider getting business interruption insurance for protecting your cash flow and operations. It will cover your fixed costs such as rent and provide financial support for the restoration of your operations. It is beneficial for all service providers and especially for those using large premises and lots of specialised equipment.
Unlike manufacturing and retail companies which require product liability cover, you will need professional liability cover also known as indemnity insurance. It gives you financial protection against negligence, error and omission. It will pay compensation to clients who suffer from property damage, bodily injury, financial loss or defamation because of your service.
You have to buy public liability cover as part of your business insurance package as well. It will protect you in case you cause property damage or bodily injury to a member of the public while providing your service. It is even more important that you get business auto insurance which covers your liability as a driver. If a vehicle is used for business purposes it has to be covered as a business vehicle. Otherwise, the insurance will not be valid.
Finally, you should think about adding individual accident and injury coverage to your business insurance package. This is especially important if your service business is your only source of income.