Do I need business insurance? The answer is yes. However, shopping for business insurance can be a complex undertaking. It’s worth the search because small business insurance can aid your business in tough times.
It protects your assets from risks as part of your daily operations. Moreover, it helps you deal with third parties who may claim that your business caused property damage, financial loss or even bodily harm.
Read on for everything you need to know about small business insurance and how it can help your business.
Do I Need Business Insurance?
Small business owners that want to protect assets and increase the chances of surviving a catastrophe need small business insurance. Without this coverage, the money for medical bills, legal fees, and repairs could easily bankrupt a person.
At the very least, most small businesses would benefit from General Liability and Property Insurance. Even home-based businesses and freelancers need liability insurance.
Liability insurance provides defense and damages if your employees, products or services cause Bodily Injury Property Damage to a third party.
For example, a customer could slip and fall in your store, making a claim against your business for the cost of their medical treatment. General Liability insurance would help cover the costs.
Property insurance is necessary if you own a building or if you have business personal property. This includes office equipment, computers, tools, and other inventory. Property insurance protects you if you have vandalism, theft, fire, etc.
Considering the business loss of earning insurance is also smart to consider. This protects your earnings when your business is unable to operate.
Commercial Auto Insurance
Commercial auto insurance protects company vehicles that carry products, equipment, and employees. This insures your work cars in case of damage and collisions.
If employees drive their own cars for your company you should invest in non-owned auto liability. It protects your business in case the employee doesn’t have insurance or has inadequate coverage.
Business owners will generally pay between $750 and $1,200 for commercial auto insurance, but these premiums are based on location and the requirements of each state. You can also pay more depending on if you opt for additional coverages, such as collision or hired and non-owned auto coverage.
Business Owner’s Policy (BOP)
A business owner’s policy package contains everything that is required that a business owner needs. These often include business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance.
Because it’s packaged together, a business owner saves money by choosing a BOP instead of individual insurance policies. It’s the most popular insurance coverage packages because business owners are able to customize it to their needs as well.
BOP packages help protect your small business from devastating costs that come with property damage and lost income due to covered events and liability claims.
Worker’s compensation provides employees with insurance who were injured on the job. It provides wage replacement and medical benefits to workers. In exchange, the worker gives up his or her rights to sue their employer for the incident.
If you’re a business owner with employees, it’s incredibly important to have this kind of insurance policy to protect yourself and your company from legal complications.
Moreover, most states require you to have worker’s compensation insurance if you employ W2 employees. Penalties include fines and even jail time.
Premiums vary greatly for worker’s compensation insurance. Small business owners will pay anywhere from $500 to several thousand dollars. This is based on the number of employees, and the types of risk the employees face during the course of their work.
Professional Liability Insurance
This is also known as Errors and Omissions Insurance. It provides defense and damages for failure to render professional services or to properly render those services. This isn’t included with your general liability insurance policy.
It’s applicable for any kind of small business that provides a service, such as notaries, real estate agents, insurance agents, and lawyers.
For example, a client could make a claim against a real estate photographer because, due to the small size of a property, the photographer didn’t provide the number of images that their package stated. The photographer’s Professional Liability Insurance can help cover costs to settle the claim.
Directors and Officers Insurance
This protects directors and officers of a business against actions that may affect the profitability or operations. For instance, if a director finds him or herself in a legal situation, this type of insurance would cover the costs or the damages lost.
A Data Breach policy provides protection against loss of sensitive or non-public information about employees or clients. This includes information on computers, servers or physically stored paper files.
This is one of the most important kinds of insurance that you need. It can protect against damages against your home, along with accidents that happen at home that may have been your doing.
Renter’s insurance is a kind of homeowner’s insurance. It protects against damage to the contents of a physical property, the property itself and personal injury within the property.
This protects an individual against death. Upon your death, the insurer will pay a certain amount of money to your beneficiary. It helps you and your loved ones have peace of mind that upon your death, they won’t be financially burdened.
Personal Automobile Insurance
Personal automobile insurance covers all road vehicles. It has a dual function of protecting against physical damage and bodily injury resulting from a crash, along with any liability caused by the collision.
Personal Umbrella Insurance
Personal umbrella insurance is an extension of an already existing insurance policy that goes beyond the initial coverage. It can cover different claims, including homeowners or auto insurance.
It’s typically sold in increments of $1 million and only when liability on your other policies is exhausted.
How to Get Small Business Insurance
If this is your first time getting small business insurance, the process could be overwhelming. Brokers and insurance companies use details about your insurance to make a judgment on what coverage to offer and how much they’ll charge.
Make sure that you compile accurate information in order to get the most accurate quotes. Here is a list of some of the information you’ll need on hand:
- Business location, including age and square footage
- Inception date
- Business name
- Business structure
- Number of employees
- Total payroll
- Compensation for owners and officers
- Revenue for the past 12 months
- Estimated revenue for the next 12 months
- Revenue earned from your largest client
- Details about your business operations
- Professional certificates
- Years of industry experience
- Business-owned vehicle information
- Value of business-owned property
- Your claims history
All insurers have different formulas when it comes to determining their premiums. They all weigh the importance of your history, business size and revenue differently. With this knowledge, it’s important to compare costs from more than one insurer, and an easy way to do this is to hire an independent agent or broker to make the process easier. For instance, contact Morison Insurance Brokers Inc. for competitive insurance quotes.
Insurance agents can specialize in specific industries, so they will have an intuitive understanding of the risks you need to protect against and what is less important. It’s easier for agents to specialize to find appropriate coverages at affordable prices. Having this valuable information on hand will save you money in the long run!
Small Business Insurance for Peace of Mind
Do I need business insurance? At the end of the day, small business insurance provides peace of mind when things out of your control go wrong and the chances of risks mount. Insurance provides a sturdy safety netting so that when the inevitable does happen, you can keep your business afloat without a hitch.
If you’re running or planning on running a small business, you’ve probably already taken into account all the perils you might face. Accidents happen and the changing climate, with devastating weather events, results in an incredible amount of property damage claims.
A business’s success is assured based on its resilience through these bumps in the road. It’s up to you to take the precautions necessary for the perils you expect and don’t expect.
Ready to learn more about how to effectively protect and run a profitable small business? Head over to Small Business Brief for more informative articles!