What Insurance Do I Need As a Small Business Owner?
Owning a small business means you have a lot to protect, and the correct small business insurance coverage can be essential to your continued success. Fortunately, there are different coverage options to choose from when it boils down to protecting your business.
Though there are different coverage options, how will you know the particular one that is the right fit for your business protection?
So, i will say Here’s a rundown of the insurance you need if you are a small business owner or simply the coverage options to consider when it comes to buying your small business insurance policy.
Small Business Property Insurance Coverage
The best reason to buy small business insurance is probably to protect your tangible asset: the building in which the business is housed, the raw materials used in production, the tools used and the finished product. What would happen if your place of doing business is destroyed by fire or some other natural disasters making your equipment useless and your product unsellable?
The property coverage in business insurance policy can help protect the physical components of your business against certain risks (they vary and are clearly outlined in your plan). This coverage may cover the actual building in which your business is housed, as well as equipment, furnishings and other property you have. According to the Insurance Information Institute (III), it may also cover other costs, such as equipment breakdowns or the cost of removing debris after a covered loss.
At least, you need General Liability Insurance: Every business, even if home-based, needs to have liability insurance. The policy provides both defense and damages if you, your employees or your products or services cause or are alleged to have caused Bodily Injury or Property Damage to a third party.
Small Business Liability Insurance Coverage
No matter how meticulous and tactful cautious you are, you may never escape some unforeseen circumstances that can result in series of lawsuits against your business, so it’s a smart move to be prepared. The U.S. Small Business Administration (SBA) outlines three types of business liability coverage:
General liability coverage: This type of coverage protects you in case you are sued because of accidents, injuries or claims of negligence. For example, if someone is injured on the premises of your business and files a lawsuit against you, this type of coverage may (depending on the situation) help cover some of the related costs.
Product liability coverage: If your company manufactures or sells a product, this type of coverage may come in handy. It protects you in case your product is defective and causes injury or damage.
Professional liability coverage: Businesses that provide services often purchase this type of coverage, which protects against errors and negligence. One example, according to the SBA, is the malpractice insurance that doctors are required to carry.
Small Business Insurance Coverage Relating to Employees
Depending on the number of your employees, you may want to consider Employment Practices Liability Coverage as it protects against lawsuit filed on a groundless claim by a former employee.
Also, according to the III, all states except Texas require businesses with a certain minimum number of employees (at least three to five, depending on the state) to have workers compensation coverage, which may help protect them in the event that an employee is injured on the job or onsite.
Small Business Insurance Coverage for Business Vehicles
Just like you insured your personal vehicle, your business vehicle should not be denied insurance. Business auto coverage is available to help protect your company against liability arising from accidents done to or by company’s vehicle, as well as other features, depending on the plans.
Related: Business risks and how to avoid them
Small Business Data Compromise Insurance Coverage
Data theft, data breach or data compromise can happen to your business, it is not for the large corporations alone. So, getting data compromise coverage or data breach coverage is another way to protect your company from complications that arise from such incidents. This type of coverage helps cover against any associated legal or other costs associated data theft or accidental data release.
As you shop for a small business insurance policy, there are many things to consider:
If you run your business from home, your homeowners’ insurance plans may not cover your business or any business related property, such as, supplies, tools or customers’ belongings stored for repair. So, it will be a smart move to purchase a business insurance plan for your home-run business.
In addition to the coverage options described above, there may be even more business insurance options to consider. So, a consultation session with your business insurance agent can help you determine the best way to protect your company.