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Businesses must to able to provide proof of insurance

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Adding to the list of why businesses need to invest in a business insurance policy is that they need to be prepared to answer customers' questions about the types of insurance they carry, reported Insure.com.

The website said businesses need to also be sure that contractors they bring in to do work have necessary coverages, which include general liability insurance policies, as well as errors and omissions insurance and umbrella liability coverage.

Gary Buchanan, vice president at a New York insurance company, told the website it is a smart practice to ask a contractor or company to provide their insurance information before hiring them to complete work at a particular site. 

"Anyone in business can get a copy of their insurance certificate," Buchanan told the website. "It will show all of the insurances they have and what the policy limits are."

Buchanan suggested most contractors can reasonably be expected to carry coverage of at least $1 million.

According to Forbes, another type of business insurance that should be considered is directors and officers insurance, which applies to the directors and officers of public companies, which can provide coverage in the event of lawsuits from employees, shareholders, customers and other parties.

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