Essential Insurance Types Every Small Business Owner Should Consider

Asking yourself, do I need insurance for my small business? The answer is a definite yes. Business people should consider small business insurance because it helps to minimize the risks and uncertainties that come with doing business. But how do you choose the proper kinds of coverage? A good starting point is to consider these essential small business insurance policies:

• General Liability Insurance
• Workers Compensation Insurance
• Commercial Auto Insurance

Also, the luggage and equipment that enable your business to run should not be overlooked.

Basic Insurance for Small Business People

An entrepreneur speaks with a buddy about what sort of insurance policies she agreed to take for her enterprise. You’d be shocked to learn that the average cost per customer injury or property damage claim is about $30,000. This is why many businesses will discover considerable worth in the Business Owner’s Policy (BOP).

Business owner’s policy, also known as BOP, is just like its name a single policy that covers both business property and liability. This is something we can help you fill still ensuring you close all the gaps which your BOP is likely to cause. We guarantee to prepare you for whatever comes your way; be it an accident, liability claim, severe weather, or any other mishap.

How to identify the right types of insurance for your small business

The kind of risks your business faces defines the type of small business insurance you’ll need for your business. I.e. if your business owns valuable assets, an insurance policy such as a commercial property insurance policy could be useful. Similarly, if your business has and operates automobiles, then commercial automobile insurance might be required. Further, if you have employees, your state may require a workers’ compensation plan also known as workers comp.

For businesses whose exposure is deemed low, there is the Business Owner’s Policy (BOP), which combines different policies and thus is cheaper. This policy enables one to have multiple coverage genres including general liability, professional liability, as well as workers’ compensation to consolidate insurance and exhaust as well as reduce insurance costs.

Which Kinds of Insurance Are Necessary for Many Businesses?

General Liability Insurance

Who Needs It? This coverage is important to small businesses that receive customers to their physical business premises or shop.

Purpose: This of course helps shield against potential expenses such as those caused by damage to the physical property or bodily harm.

What Does It Cover? Liability insurance can pay for claims arising from bodily injury, property damage, damage to the company’s reputation, harm caused by the advertisement, or damage to rented premises.

Example: This insurance will help you to sell your products since it covers the medical expenses of a customer who possibly falls while shopping at your store. Without this coverage, all those costs end up coming straight out of your wallet.

Workers compensation insurance

Who Needs It? Workers compensation insurance is something that any type of small business, but particularly those that have employees, should obtain.

Purpose: This coverage provides for employees who are involved in an accident either at the workplace or suffer from a work-related illness.

What Does It Cover? In the event of a work-related injury or illness, workers’ compensation can help cover:

•         Medical expenses
•         Lost wages
•         Disability benefits
•         Funeral costs

Example: If an employee is hurt by lifting heavy boxes, in such a way as to develop tendonitis, then this can help pay his or her medical bills.

Commercial Auto Insurance

Who Needs It? Business auto insurance is highly recommended for businessmen with employees using other people’s, hired, rented, or owned automobiles. It also has provisions for employees who Stage 2: use their personal own vehicle for work-related activities.

Purpose: This insurance assists in defending the expense of incidences for which you or your employees are responsible.

What Does It Cover? This policy ensures both the company’s property and any physical injuries that happen when operating a business vehicle.

Example: This coverage can help to pay for damages if an employee uses your company’s van for deliveries and hits a customer’s car when pulling out of your parking lot.

Professional Liability Insurance

Who Needs It? Especially for businesses that give profession-related services organization and advice, professional liability insurance is very much needed.

Purpose: It assists in the provision of protection for errors or omissions that may occur while conducting service delivery to clients.

What Does It Cover? This coverage safeguards you in case you or any employee provided professional services gives out wrong information.

Example: For instance, the failure by an employee to give the right advice, for instance, recommending the client to invest in a project that will result in a loss instead of a profit, the client may sue for negligence. In such cases, the professionalism of the insurance that seeks to protect you might well come in handy for your lawyer fees.

Business Income Insurance

Who Needs It? Business income insurance is necessary for most small businesses as the policy pays for the lost income when the business has to shut down due to damage to the property it owns.

Purpose: This policy helps you to make up for the loss in daily earnings since your business has closed due to damage to the physical properties, for instance, fire.

What Does It Cover? It provides a continuation of an economic loss during the time that a business is unable to operate for a short time.

Example: Business income coverage can assist in replacing the lost income in reaction to specific events, for instance, fire, windstorm, theft, and any other calamity that is eligible under the policy. For example, if your restaurant has been closed for a short time due to a fire outbreak this coverage makes it possible to be compensated for the losses endured.

Commercial Property Insurance

Who Needs It? Commercial property insurance is useful to any company that owns or leases a building as well as all those who use tools and equipment for business activities.

Purpose: This policy protects the property against loss through such events as fire, break-in, theft, wind, and lightning.

What Does It Cover? Business property insurance covers both the physical space of your business and anything within it such as tools, equipment, merchandise, and furniture.

Example: This coverage can help if a fire happens to your office building by helping you replace equipment inside.

Business Owners’ Policy (BOP)

Who Needs It? Business owner’s Policy also known as BOP is perfect for businesses that experience ordinary risks and wish to be economical by packaging their insurance.

Purpose: This policy enables you to bundle together many coverages for instance business property, general liability, business income, and so on.

What Does It Cover? BOPs offer protection against those losses that result from events such as fire, theft, and other named calamities.

Example: If a customer slips and falls and suffers an injury while in your store your Business Owners’ Policy will assist in catering for their medical bills.

Data Breach Insurance

Who Needs It? It is called data breach insurance, or cyber liability insurance, and should be considered by all the businesses that seek to avoid cyber threats like breaches and hacking.

Purpose: Usually this coverage will allow you quickly and effectively to react in case of data leakage or cyber attack.

What Does It Cover? Data breach insurance can assist you in various situations, including:

• In case your business computers get infected by a certain virus where private or sensitive information is affected. Even where customers or patients sue after loss of their Personally Identifiable Information PII or Protected Health information PHI.
• If you spend much money and time responding to your business’s crisis after you have released consumers’ data to the public.

Example: Manually, if a hacker corrupts files stored in your computers and then proceeds to demand a ransom for the files to be restored, an insurance policy for data breaches will specifically guide you on how to handle the attack.

Is Liability Insurance Right for Me and My Small Business?

The fact is that each small business is revealed to certain risks and dangers. To safeguard your business effectively, it’s essential to obtain the appropriate liability insurance, which may include:

•     Business general liability insurance
•     Liability insurance
•     Employment practices insurance
•     Management liability insurance is an important part of protecting professionals and companies who work in a management capacity from legal claims from clients or customers.
•     It’s also referred to as data breach or cyber liability insurance.

These different kinds of liability insurance concerns a variety of needs your business may have in covering potential claims against your business.