Small businesses are different from large or medium-sized companies in many ways. They’re often run by individuals, not departments. As a result, small business owners have to wear a lot of hats when it comes to managing their organizations.
One thing that’s the same about every company? The need for insurance policies that can protect you against lawsuits, claims, and other dangerous events. In this article, we’ll discuss how you can get the insurance you need to keep your small business safe.
Why You Need Business Insurance
A small business owner, there may be a wide range of unexpected events that occur during your first few years of running a business and even beyond.
By having small business insurance, you protect yourself and your business from any hefty cost of running a business. Anything ranging from natural disasters, accidents, or even lawsuits could quickly put you out of business before you even had a chance to begin.
By making the investment and getting protection with small business insurance, you can protect the longevity of your business for years to come.
It would be best to keep in mind that you may be legally required to purchase business insurance. Some states have specific stipulations regarding the amount of coverage you need, so it is best to check your state’s website to gather more information.
Six Main Types of Business Insurance
General Liability Insurance
General Liability insurance for just about every business.
General liability insurance usually covers claims of bodily injury, property damage, personal and advertising injury. It also protects the policyholder against costs incurred in defending legal action arising from these types of mishaps.
Workers’ Compensation Insurance
The hardest thing about uninsured workers can be the risk of facing legal fees and penalties.
Worker’s Compensation insurance will cover your costs if one of your employees gets injured on the job. It may cover his or her medical expenses and might also include some compensation for lost wages.
Product Liability Insurance
Product liability insurance is for any business that produces, distributes, wholesales, or manufactures any retail goods and can protect against claims of faulty products which result in bodily damage to the consumer.
This form of insurance protects against any financial loss resulting from a defective product that has been produced and has caused any property damage or bodily harm to the consumer.
Professional Liability Insurance
Professional liability insurance (also referred to as Errors & Omissions insurance or E&O), is for any business that provides professional services to its consumer. This form of insurance protects the company from financial loss resulting from malpractice, negligence, and legal costs.
Commercial Property Insurance
Commercial property insurance is for businesses with an immense amount of property and physical assets. This type of insurance protects against any damage arising from various factors such as vandalism, Hail storms, theft, fire, floods, smoke, and civil disobedience.
If you are running a business from your home, you may also want to look at home-based business insurance. This type of insurance is will cover inventory and any business property that is stored in the home. Most homeowner’s policies won’t cover business assets.
Commercial Auto Insurance
Commercial auto insurance is necessary if you use any vehicles in your business aside from your own personal car. The cost of business coverage can vary depending on the value of the vehicle, deductible, and healthcare limits.
What is a Business Owner’s Policy (BOP)
A business owner’s policy can protect your business from a number of financial damages. A Business owner’s policy is a package of insurance containing several different types of insurance. It can protect a business against commercial property damage, a number of employees, bodily injury claims from third parties, and any potential lawsuits that may result from the actions of your business. This policy is beneficial for small businesses that have a large number of physical assets but only want protection from one policy.
It can often provide protection for multiple types of insurance in order to provide peace of mind to the business owner. It is recommended that you check with your insurance agent about purchasing this type of policy in order to ensure you are receiving the appropriate small business insurance coverage.
Where To Purchase Business Insurance
Now that you have a better understanding of what type of business insurance you may need to purchase, the next question will be, where do you buy it?
Many insurance companies do offer business insurance; however, there will be some that are more beneficial for business owners.
When it comes to purchasing your business insurance, there are a few steps that you need to take.
- First, you will need to make sure that you assess your risks first to find out exactly what type of business insurance you need.
- Second, it would be beneficial to find a licensed insurance agent to assist in seeing some of the better options for your specific business entity and needs.
- Thirdly you will want to shop around. Shopping several brokers for business insurance quotes gives you the upper hand at finding which company will have the best deal so that you can get more bang for your buck.
You should compare the terms, rates, and benefits that each insurance broker provides. This process may be timely; however, the time invested upfront in doing this step will save you money in the end.
Being a small business owner can be one of the most rewarding experiences you have ever come across. By now knowing about small business insurance, if you need it, the types you can purchase, and how and where to buy, you can take the necessary steps to protect your vision for years to come.
Be sure to reassess your business every year. As you continue to grow your business and expand your horizon, new issues may pop up that you now need to ensure you are insured on. By reassessing your business every year and looking for insurance options that are better suited, it will position you to stay on track and continue to grow.