Business Owners: Four Types of Insurance You May Need Before You Hire Your First Employee
Your business is expanding, and you are ready to hire your first employee. Before you do, you need to ensure that you have the right business insurance policies in place. Here are several different types of insurance policies to consider and a look at how they may benefit you:
1. Worker's Compensation Insurance
If you plan to pay your employee at least $7,500 per year, you need to have a worker's compensation insurance policy in place. This policy pays out if your employee is injured on the job physically or psychologically.
It protects you from having to deal with an injury lawsuit out of your own pocket, and it protects your employee from having to face missed wages after an injury.
If you plan to pay your employee less than $7,500 per year, you don't have to invest in worker's compensation insurance unless your employee is an intern. However, it is important to note that these salary numbers are from New South Wales, and exact figures and requirements may vary in your state or territory.
2. Supplemental Health Insurance
In addition to insurance policies you are required to have for your employees, you may also want to explore the possibility of supplemental policies. By offering your employees supplemental health insurance, you provide them with a perk that may make them want to work for you.
Other extra policies to consider include dental insurance or life insurance.
3. Fleet Insurance
If your employee is going to be driving as part of his or her job, you need to investigate car insurance. If your employee is going to be driving his or her own car, you need to see if his or her insurer will cover driving while the employee is "on the clock".
Alternatively, if your employee is going to be driving your car, you may want to invest in fleet insurance. Fleet insurance is business car insurance, designed primarily for businesses that have employees driving company cars.
4. Liability Insurance
You likely already have liability coverage for your business, but before you hire your first employee, you may want to consider strengthening your plan. When you have a sole enterprise, you are exclusively responsible for everything, from de-icing sidewalks to repairing banisters.
As you do everything, you are assured that it is done correctly and that no negligence is involved. When you hire an employee, you have to trust them to take care of things, and if they forget to de-ice a sidewalk or do anything else that puts a client in danger, you may end up facing a liability lawsuit. To counteract that unknown, consider increasing your liability coverage.