If you’re the owner of a limited liability company (LLC), chances are good that you chose that form of business registration instead of a sole proprietorship in order to shield your personal assets. Doing business as an LLC allows your business assets to be separated from your personal belongings. It doesn’t, however, protect your business from many of the liabilities and risks it may face. You likely need to consider business insurance to do this.
What is LLC Insurance?
LLC insurance can help protect your business from various liability claims such as property damage or bodily injuries caused by:
- Something within your business
- Someone within your business
- A product made or sold by your business
Depending on what type of business you’re operating, there are several types of business insurance that may be necessary for you to consider. General liability insurance, also called business liability or commercial liability insurance, is something nearly every business can use. This is protection against claims made for bodily injury or property damage for which your business is held responsible. It can help with such things as:
- Bodily injuries caused while someone is visiting your business, including medical treatment costs
- Property damage caused by an employee such as a broken window or hole in the wall while working on a client’s home
- Property damage to property you’re renting. This includes covered perils such as a fire or explosion
- Reputational harm as in alleged slanderous or libelous statements made about a person or business
- Advertising errors or injuries such as copyright infringement in marketing or advertising materials
Business Owners Policy
A popular choice of protection for many small businesses is a Business Owners Policy, or BOP. This consists of three different types of coverage bundled into one policy and includes:
- General liability insurance – as explained above
- Business income insurance – designed to help your business replace lost income if you’re unable to operate due to covered property damage
- Commercial property insurance – helps protect from covered losses of your business property, rented or owned. This is especially important for home-based businesses, for which most homeowners policies are lacking in coverage
Additional Business Coverage Options
While the BOP bundle may be a good startup foundation for many LLCs, there are numerous other types of business coverage that you may want to consider. Your insurance agent can help you determine exactly what you need for all-around coverage.