Certain businesses must be both insured and bonded to operate legally. Purchasing bonds is sometimes required to gain a contract deal, as it shows that your company is backed by the necessary funds to pay for unforeseen liabilities. Here’s a look at how to get your small business insured and bonded.
Insurance for Your Business
The easiest way to get small business insurance is to complete an application online and then wait for approval. It’s best to discuss your business insurance needs first with an insurance expert to make sure you’re covered in all areas that present risks. One of the worst things that can happen to a startup is to get sued without insurance.
Types of Business Insurance
Business insurance begins with a standard plan covering basic liabilities and property damage due to specific natural disasters, theft, and vandalism. You need the coverage in case someone trips and falls at your business location and requires hospitalization. Even in a safe environment, a customer can sustain injuries from an unforeseen accident, which your insurer will have to pay for.
There are many types of endorsements that can be added to a basic plan for any given industry. You may need an endorsement, for example, to extend coverage limits on a certain policy. Bonding is a form of insurance in the sense that it assures the other party that a certain amount of money will be made available to cover any mishaps.
One of the few mandatory types of insurance for most businesses is workers’ compensation. This coverage is required if your business employs one or more employees. It pays for the treatment of injuries or illnesses that occur to your workers while they are working. It also pays workers for lost wages.
Errors and Omissions Policies
The purpose of errors and omissions (E&O) policies is to protect top executives in the event they make costly errors. This policy covers various mistakes made at the decision-making level, such as improper governance. Professionals who commonly face E&O claims include contractors, lawyers, insurance agents, architects, and engineers.
When Do You Need a Bond?
Bonds act as guarantees that cash will be paid to an entity known as an obligee for a specific obligation. They are often used for construction contracts with government organizations, such as for building a community sports arena.
You can purchase bonds through the specialty department of a major insurance company or through a surety bond agency. Another purpose for bonds is to pay for a loss. Some state transportation departments accept bonds in lieu of auto liability insurance.
Every business needs to understand the requirements associated with bonds and insurance. Bonds may come into play when a business signs a contract with government organizations such as schools. Contact us at Gant Insurance Agency to learn more about small business insurance. Located in McKinney, Texas, our dedicated team is ready to assist you today.