One of the benefits of franchise ownership is that you have the backing of an established corporation to guide you in your journey. Although valuable, there are certain measures you must take on your own to protect yourself in case of certain events, such as inventory loss or customer injury on your property. This requires that you insure your franchise.
There are many types of insurance you can take out to protect your business from financial loss. Most will depend on the franchise you start and the industry you’re in. Your franchisor can guide you to which types of insurance are most recommended or required, but in the meantime, here are some of the most common types of insurance you might need.
Public Liability
If you’ll welcome customers or clients into a store or onto your premises, such as you would with most restaurant franchises, you must have public liability insurance. This coverage protects against slip and fall accidents, or any other event that could cause bodily injury or property damage.
You might also need public liability insurance if you meet clients off site. For example, you might start a sports franchise and use a local soccer field for your lessons. You’ll still need insurance to protect the children and parents from any injury during their time working with your business.
Workers Safety
Your employees might not be covered under the public liability insurance. In this case, you will need separate insurance to protect your staff while they’re at work.
Product Liability
If you have any type of inventory for your business, it’s a good idea to insure it against any loss or damage. This is especially true if damaged goods could cause you to close your doors until new inventory or equipment arrives.
Property Damage
If you invest in a property for your franchise, you’ll need to ensure the building where your business is housed stays in proper working order. Property damage insurance protects you in case of flood, fire, smoke, vandalism, and more.
Employment Practices
If you hire any employees to work in your franchise, you needto protect yourself from any claims an employee might file. This can include claims such as wrongful dismissal or any type of harassment in the workplace.
Auto Insurance
If you have delivery trucks or use your vehicle for your business, it’s important to protect it while it’s on the road. You should have auto insurance coverage for all of the motor vehicles used to do business on a regular basis.
Business Interruption
If your business has to shut down because of any type of accident, from vandalism to complete destruction of your property, you won’t just be out the money it takes to get back up and running; you’ll be out the revenue you would’ve earned if your doors had been open. Business interruption insurance helps you get a portion of those earnings back, so you don’t fall too far behind.
Are You Covered?
There are many factors that go into deciding which type of insurance you need when opening a franchise. Talk to your franchisors about the best insurances to get for your business model. Then, get those insurances before you break ground or open your doors, so you’re sure you’re protected from day one.
Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.