Small businesses are an integral part of any economy, and when they thrive, the entire country benefits. However, due to their size, these types of companies are quite vulnerable to and must be protected against accidents, damages, and lawsuits. Without adequate commercial insurance coverage, one mistake could cripple operations and mean the end of the enterprise.
If you’re a small business owner, you need to understand how best to protect your company and what types of insurance you must have. To help you get started, we’ve listed the five most important policies to sign up for below:
✓ Business liability insurance
If a customer gets injured or their property is damaged while visiting your business, you may be liable. A business liability insurance protects you and covers the cost of treatment/replacing any damaged property. It also pays for any legal charges incurred if your business gets sued, either by a customer or another business.
Other claims covered by this type of insurance include advertising injury, copyright infringement, and reputational harm. In truth, it’s almost impossible to set up a small business without business liability insurance because landlords, lenders, licensing bodies, and business partners will require it before signing a contract with you.
✓ Commercial property insurance
This policy protects your business’s physical location and all the equipment you use in your day-to-day operations (e.g., computers, office furniture, and specialized machines). Both owned and leased property are covered by commercial property insurance, and any losses caused by fire, theft, vandalism are paid off by the provider.
There’s a policy called the small business insurance (or business owners policy) that combines business liability with commercial property and business interruption insurance (replaces lost income if a company needs to be shut down temporarily for a valid reason). If your business has less than 100 employees and earns revenues lower than $5M, you can leverage this to reduce your insurance costs.
✓ Cyber liability insurance
For businesses that save confidential company records or customer information online, it may be expedient to get cyber liability insurance. This policy helps protect your company in case of a breach or cyberattack, i.e., if customer data gets exposed and you get sued, the insurance provider covers the costs. The provider also defrays the costs of notifying customers that their information may have been stolen.
✓ Errors and omissions insurance
Employee mistakes can be very expensive, especially for companies that provide professional services like accountants, business management consultants, tax advisors, and real estate agents. So, to protect your business from the liability that follows errors and omissions, get a suitable insurance policy. This plan will cover the costs of hiring a lawyer, settling out of court, or paying an amount handed down by the courts.
✓ Workers compensation insurance
As long as you have workers, then you need this policy. 49 of the 50 US states require workers compensation insurance (Texas is the exception) and you can’t operate in those states without it. The plan covers work-related sickness & injuries, and the insurance provider will pay for lost wages, medical treatment, and any disability benefits – if needed.
Depending on the type of business you run, other types of coverage you may look into include commercial umbrella, technology errors and omission, commercial auto, product liability, and directors & officers insurance. The most important benefit of insurance coverage is that it minimizes the effect of accidents, mistakes, or external attacks. Occurrences that would otherwise spell the end of your company become a minor issue that can be resolved while business continues.
And the best part is, if you work with a proficient insurance advisor, you can get all the coverage you need for your small business without paying too much in monthly premiums. Do you need professional input on which policies you need and who the best providers are? Our specialist is on hand to guide you at this critical juncture. To get started, schedule a consultation by following this link
