Owning a Limited Liability Corporation or LLC allows you some protection between your personal assets and the company’s assets. Yet, it remains important to maintain quality business insurance. No matter what type of business you own, having the right type and amount of coverage is critical. The type of coverage you need depends on the type of business and your asks and risks. Here’s a closer look at the factors to think about when buying coverage.
What Does LLC Designation Mean to You?
One of the main reasons to move your sole proprietorship to an LLC is asset protection. When you make this move in establishing your company as its own entity, you create a divide between your personal finances and your business assets.
If someone sues your business for a loss, your personal LLC property has a higher level of protection against their claims. Yet, this type of designation does not help in actually protecting those assets. For that, you need business insurance.
Protecting Your Assets
To choose the best business insurance for your company, start with your assets. What type of assets does your company own? Assets might include:
- The building it operates in, whether it is a lease or owned
- The equipment within your business
- The inventory and stock
- Computer systems
- Vehicles the company owns
Choose property insurance to cover all property at your location. If you own any vehicles, a commercial auto insurance policy is necessary as well. Vehicles used for private use, not business, do not fall into this area, however.
The other key component of business insurance is liability protection.
As noted, someone may sue your company. If they do, you could face financial loss. Liability insurance helps to minimize this. It covers a wide range of claims customers or third parties can make against your business. This includes injuries and product defects. Some policies can include claims of unfair treatment by employees and cyber threats as well.
It is important to choose liability insurance at a value high enough to minimize these risks. As an LLC owner, it is important to work with your business insurance agent on this. You don’t want your personal property exposed to these types of risks. That is why comprehensive and high-value liability insurance is so important. It helps protect your company from losses you cannot predict.
Also Read: Financial Tips for New Business Owners