What types of insurance do business owners need?


Quick Answer

Business owners need general liability, product liability, professional liability and commercial property insurance, reports the U.S. Small Business Administration. They must also provide workers' compensation insurance, unemployment insurance and, in some states, disability insurance for their employees. Some businesses may also need vehicle insurance and home-based business insurance, adds Entrepreneur.

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What types of insurance do business owners need?
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Full Answer

General liability insurance covers businesses from lawsuits arising from injuries, accidents, slander and libel, explains the U.S. Small Business Administration. Businesses that manufacture and sell products need product liability insurance to handle injuries and resulting lawsuits involving product safety. Professional liability insurance protects a business against claims of errors, negligence and malpractice while providing services to customers. Commercial property insurance protects the properties that businesses use from losses due to vandalism, weather, fire, flood and civil disobedience. However, if they want to cover work delays due to catastrophic events, business owners must purchase separate business interruption insurance, points out Entrepreneur.

Companies need liability insurance for their vehicles, advises Entrepreneur. Although personal auto insurance covers business owners' own cars even if they use them for business, owners must buy special insurance if they use them for paid deliveries. If small businesses operate from the owners' homes, homeowners insurance does not cover the loss of business equipment and inventory, and businesses need home-based business insurance to cover this.

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