Pennsylvania Small Business Insurance
When you are planning to start a new business, there are so many different things to consider. Your start-up costs will include everything from the office space or storefront to supplies and marketing ideas. This new business is not only a labor of love, but also a major financial investment. Therefore, high on your to-do list must be obtaining Pennsylvania small business insurance to protect this important investment.
Business insurance is designed to protect your investment in the event of unforeseen crises such as a natural disaster, the death of a partner, an injured employee, or a lawsuit. If your business has employees, you are required to pay for workman’s compensation insurance, unemployment insurance, and possibly state disability insurance.
Workman’s compensation insurance covers medical costs, rehabilitation costs, death benefits, and lost wages for employees that are injured at work. Small businesses established as sole proprietorships or partnerships aren’t required to purchase workman’s compensation insurance as long as all of the business’s employees are owners of the company. In this case, the purchase of liability insurance is left to the discretion of the owners.
Unemployment insurance is a federal program whereby eligible unemployed people will receive cash payments for a specified period of time. These benefits are paid from funds which are the result of employer, employee and government contributions. Once again, if your employees are also owners of the business, you are not required by law to carry unemployment insurance.
Types of Business Insurance
There are insurance policies available for almost every conceivable business issue, but they vary widely in cost and coverage. Because of the many options available, it is important to talk over your specific needs with your insurance agent.
Some commonly available policies are:
General Liability Insurance
This liability insurance is purchased by business owners in order to protect them from lawsuits related to accidents, injuries, and claims of negligence. These policies protect small businesses against claims resulting from bodily injuries, property damage, medical expenses, libel, slander, defending lawsuits, appeals costs, and other legal issues.
Product Liability Insurance
Companies may be liable for a product’s safety if they are involved in its manufacture, wholesale, distribution, or retail sale. Product liability insurance protects the small business against financial loss as a result of a defective product that causes injury or bodily harm. The amount of insurance that you purchase will depend on the type of products you sell or manufacture. For example, a furniture store would have far more risk than a card shop.
Professional Liability Insurance
It is important that business owners providing services, such as a hair salon, should consider having professional liability insurance. This coverage, also known as errors and omissions insurance, is liability insurance that protects your business against malpractice, errors, and negligence when providing services to your customers. Some states require you to carry this type of policy, depending on your profession. Most states require physicians to carry malpractice insurance in order for them to practice medicine in their state.
Commercial Property Insurance
For a small business that operates a store-front or otherwise occupies a building, property insurance will cover everything related to the loss and damage of company property. The loss may be due to a wide variety of events such as fire, smoke, wind storms, hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers and money.
As with homeowners’ and renters’ insurance, property insurance policies come in two basic forms:
All-risk policies cover a wide range of perils, except for those specifically excluded in the policy. They are usually more expensive and generally cover risks faced by the average small business.
Peril-specific policies are exactly the opposite and only cover losses that are specifically listed in the policy. Peril-specific policies usually include fire, flood, crime and business interruption insurance.
Home-based Business Insurance
In spite of what you may believe, homeowners’ insurance policies do not usually cover home-based business losses. It is possible that you may be able to add riders to your pennsylvania homeowners‘ policy that will cover normal business risks, such as property damage. You will need to investigate the limits of coverage that will include your business, especially concerning general, product, and professional liability coverage. You may need to purchase additional policies to cover these risks.