Is your company protected from potential lawsuits or unlikely events?
Small business insurance is what protects the global economy. It prevents businesses from going under because of an unfortunate event like a cybersecurity attack or a business interruption due to a storm.
If you think of insurance as just another expense, think again. It's part of the cost of being in business, otherwise, you risk losing your business and personal assets in the event of an accident or another unfortunate event.
There's no reason to wait to get a business policy for your business. If you're not sure where to begin, keep reading.
This article will cover the types of business plans and tips to help you choose the right policy for your business.
The Types of Small Business Insurance
Small business owners tend to think of insurance as a general liability policy. That's a good place to start, but depending on your needs and your industry, your business may still be exposed.
Professional Liability Insurance
This is also known as E & O (Errors & Omissions) Insurance.
In the event of a lawsuit for errors that have some done harm to a client or for a failure to perform your contractual duties, you'd be covered.
Each industry has its own insurance needs, so you won't find a one-size fits all professional liability policy.
Business Auto Insurance
Insurance policies will vary from location and situation.
For example, if your employees use their own cars for business activities, their insurance policies should cover them. If your employees drive a business car for any activities, you need to be sure that those cars have coverage.
Business Owners Policy
If you're a business owner, this is a policy that is worth your consideration. A business owner's policy bundles several policies into one. They can be tailored to your specific situation, but they tend to include liability, vehicle, crime, property, and business interruption policies.
Home Based Business Insurance
Do you work from home? Don't assume that your homeowner's policy will cover your business since it's a home-based business. It won't be.
You want to make sure that your business equipment and inventory are covered. If you have clients meet you at your home for business purposes, you'll have to get additional coverage.
Have a conversation with your home owner's policy provider. They may have options to add coverage to your policy.
Then, compare it to quotes from other providers.
Cyber Security Insurance
There's a misconception that cyber attacks only happen to large corporations. The truth is that they happen to companies of all sizes.
An employee can click on a phishing email, or your accountant could send money to a bank account in Nigeria thinking that you had made the request.
These hacks cost small businesses revenue, business opportunities, and customers. Those are costs that your business can't afford to pay.
This type of insurance will cover your business in the event of an attack. It's a necessity if your company handles your customer's data. If something were to happen, insurance would cover legal, liability, and public relations costs.
Key Person Insurance
Who is the one employee your business can't survive without? The answer could be you as the business owner, another founder, or a key employee.
If there are people within your business who are critical to the survival of the business, you should consider Key Person Insurance. This is essentially a life insurance policy on the key people within your business.
Product Liability Insurance
You could have the strictest quality assurance controls for your products. It doesn't matter if someone claims that your product caused harm or some kind of damage to a user.
With product liability insurance, your business is covered. If your business manufactures products, you will need to have this type of small business insurance.
Worker's Comp Insurance
When you're getting ready to hire your first employee, you'll need to invest in worker's comp insurance. This will protect you in the event your employee is injured on the job. That includes common occurrences like carpal tunnel syndrome or slips at the office.
Commercial Property Insurance
If you own or lease an office space, you'll need to have insurance to cover inventory, furniture, signage, and equipment.
Property insurance will cover you in the case of fire or theft. You will need to check with your insurance provider to see if your policy includes natural disasters like floods or earthquakes.
Business Interruption Insurance
If there is some kind of natural disaster in your area, your business could have to close, and you'll lose income.
With this kind of policy, you'll need to read the fine print. When Hurricane Sandy struck New York and New Jersey, some businesses were left closed for weeks due to power outages and evacuations.
Insurance didn't cover these businesses because the policies stated that evacuations weren't covered and there had to be physical damage to the business in order for claims to get paid.
Tips to Decide on the Right Small Business Insurance Policies
Don't assume that because your business structure is an LLC, you're protected from any lawsuits. An LLC does protect you to a certain extent.
But it only protects your personal assets in the event of a lawsuit. Your business isn't protected, and without insurance, your business will be responsible for everything from attorneys' fees to damages awarded.
With so many types of insurance out there, how do you choose the best insurance for your business? You have to know what your business needs are.
Start by taking a look at your entire business. List the properties of your business, assets, inventory, and other potential risks.
You should get coverage for the risks that would leave you and your business in dire straits if anything were to happen. You could find that you need several policies because general liability won't cover everything. Then you can start to get quotes for your business policies.
Don't Wait to Protect Your Assets
Small business insurance is a necessary part of doing business. Without it, you're putting everything that you worked hard for at risk. Not only that, but your family and your employees are protected when your business had adequate insurance.
Don't wait to protect yourself. Go through your business, determine where the most risks lie and get adequate insurance coverage. Start by getting a quote for insurance today.
