Business Insurance: Which Coverage Policies Are Required For Sole Proprietors?

​For people who operate as sole proprietors, solid business coverage helps protect them from lawsuits, destruction of properties, and loss of income. Compared to larger corporations, sole proprietors face a higher level of risk. 

While many sole proprietors believe they have fewer chances of being sued, they frequently lack the tools that larger corporations have to endure the consequence of a costly legal battle.

Coverage Against General Liability
Apart from the traditional "slip and fall" coverage it provides from third-party liabilities, this also covers:

• Destruction of someone else's property 
• Product liability (if you're sued for a defective item)
• Marketing harm 

BOPs also combine general liability and business property damage coverage plans into a single low-cost package with multiple benefits, including:

• Lawsuits filed by customers
• Defamatory legal costs
• Replacing destroyed or missing commercial property
• Lost income substitution

E&O Insurance For Expanding Businesses
Professional liability insurance (aka errors and omissions insurance) is frequently used by those in the professional services industry, like real estate and accounting. For example, it'll cover you if you're sued for professional mistakes like:

• Not meeting deadlines
• Information breaches
• Unfinished work
• Intellectual property infringement

Worker's Compensation Coverage
When you start expanding and hiring, make sure you have worker's compensation insurance in case of accidents necessitating:

• Medical expenses
• Continued care
• Loss of income

Check-in with your state requirements to see if you're expected to have a certain number of employees before getting this plan.

Business Interruption Coverage
This plan may compensate you for any financial losses if your company is forced to shut down due to unforeseen events like severe weather. On average, it covers lost income, everyday costs, rent, costs for relocating, etc.

Conclusion 
A sole proprietor is a single business owner who reports their business income on an individual federal income tax return. Additionally, sole proprietorships have many different coverage policies and requirements depending on the type of business and where it operates in the United States. 

Hopefully, this article helped you understand which coverage policies are required for sole proprietors.

At McClain Matthews Insurance, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays, and we're here to help you out. Learn more about our products and services by calling our agency at (317) 298-7500. You can also request a free quote by CLICKING HERE. Any coverage discussed is not guaranteed. Please contact us today to go over your policy to ensure your needs are met! We are here and happy to help.