Business Insurance: Way to Protect Your Company – Part01

So you started a business, you’re generating revenue, you’re maximizing profits. Things are going great until, hey, your business calls me some major damages. I’m suing you! That’s right, you get hit with a lawsuit, and all of a sudden now your insurance/business-insurance-way-to-protect-your-company-part01/">business assets are at risk. Your LLC can’t protect you because, okay, that only shields you from personal liability. But what about your business assets, right? Like your business vehicles or any real estate properties you have within the LLC or within your business, or equipment and tools purchased by your business, and of course, any business cash you have on hand?

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Well, the number one way to protect your business assets is with business insurance. So in this video, what I want to do is cover what business insurance is, the different types of business insurance that you should know about, and how you can get it all set up. But before I dive in, if you’re new to the channel, hey, I’m Sean with Life Accounting, the accounting company that helps you save on taxes and build more wealth. Please do me a favor and like this video now or at any point that you feel like I have earned it. It goes a long way in helping this video reach more people like you who need to learn how to protect their business assets.

All right, let’s dive in.

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What is business insurance? Look, every business has assets, and you work hard to make your business a success. But what would happen if you got sued? Okay, business insurance is designed to protect your business from major risks and events happening. This includes stuff like lawsuits, property damage, or even theft and stolen property. Some policies will even hire attorneys and handle legal cases for you so that you can focus on running your business. So whether you’re getting started now or you’ve been in business for years, it is crucial to have the right coverage in place. Otherwise, you could jeopardize your business growth and end up having to deal with a very costly legal battle.

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And look, your LLC cannot protect your business like the right business insurance policy can.

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Small business insurance required by law: Depending on the type of business that you operate, there are three types of insurances that can be required by law. The first one is known as unemployment insurance. Okay, so this insurance protects your employees if they lose their job through no fault of their own. It allows them to continue to receive a portion of their income while they start seeking out new employment. Small business owners or employers pay for this unemployment insurance through payroll taxes, and then the state government administers it. So if you have W-2 employees, then usually you can use your payroll provider—I use QuickBooks—to set up UI or unemployment insurance coverage for your business.

The second type of insurance that may be required by law for small business owners is disability insurance. Okay, this insurance protects your employees if they are unable to work due to an injury or illness that they personally have. Now, there are two types of disability insurance: short-term and long-term. Short-term insurance usually provides benefits for a period of six months or less, and then long-term disability insurance provides benefits for an extended period of time, typically two years or even more.

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The third and last type of insurance that most states require you to carry as a small business owner if you have employees is Workers’ Compensation Insurance. Because, okay, you are responsible for the safety and well-being of your employees. This includes providing a safe working environment and protecting them from any potential injuries. Now, as the small business owner, you can and you should take steps to minimize the risk in your workplace, but accidents still happen. So if an employee is injured on the job, Workers’ Compensation Insurance can help cover their medical expenses and any loss in wages that they have.

Now, while some of these insurances are required by law for certain small businesses, there may be other policies you want to consider as well. For example, if you have a fleet of vehicles, you’ll need commercial auto insurance. If you sell products, you may need product liability insurance.

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Related: Business Insurance: Way to Protect Your Company – Part01