Starting out small and then going your way up the ladder of success takes a lot of courage. Taking on risks and exploring your way through is something that defines small businesses.
This is why ensuring your business is one way to prevent any major setbacks from having a negative impact on your progress. Nothing great comes without risk but taking risks you can afford is best done with the right type of small business insurance.
What Is Small Business Insurance?
Also known as commercial insurance, small business insurance seeks to protect the property, assets, and finances of your small business. This is why it’s crucial to have small business insurance, especially in this day and age where physical risks are not the only threat. Data breaches are common as well and one is sometimes enough to bring your small business down.
What Is Covered By Small Business Insurance?
Regardless of the coverage you choose, there are some things you can anticipate being protected by small business insurance:
- Losses regarding your finances from theft by employees or customers.
- Protection from claims made against the services or goods of your business.
- Coverage when an employee is sick or injured.
- Capital loss caused by storms, floods, fires, and any other natural disasters.
- The interruption of your business is caused by some immediate danger.
- Required expenses caused by damaged equipment due to an unexpected hazard.
- Any expenses caused by a data breach and costs that involve informing customers of it.
What To Keep In Mind When Buying Small Business Insurance?
The first thing you need to consider when buying small business insurance is to find out the risks of running your business. If you find this to be a difficult task, there are companies that are able to help with assessing your risks.
Insurance agents should help you understand what you need for your type of business. This is why you should go with a company that works with licensed agents. With a licensed agent, you’re also safe from fraud. Of course, you always have the option of hiring brokerages, such as Aha insurance, who work with multiple insurance companies to help you find the best quote.
There are some legal requirements for small businesses when it comes to insurance policies. Depending on the type of business you run, you may need to go for an insurance policy that is deemed mandatory by the state.
How much an insurance policy covers is a crucial factor in selecting small business insurance. There are companies that are completely transparent in what they offer. Beware of those that don’t tell you everything from the get-go.
Rates & Reviews
You should also do your own due diligence by searching online and checking out reviews and rates. Get opinions and quotes from different sources and agents so that you can compare them and go for the option that suits your business best.
Types Of Small Business Insurance
With general liability insurance, you’ll be able to stay covered from what are known as third-party injuries. These involve advertising injuries such as slander and copyright infringement and third-party property damage too.
Professional liability insurance covers businesses that provide services. This type of insurance helps protect you from harm caused by providing your services to customers.
Similar to professional liability insurance, product liability insurance is able to cover legal costs in regard to a product you sell. This type of insurance is also known as omissions or errors insurance.
When you have expenses and even losses that occur from an incident be it from a natural disaster or human error, business income insurance can help cover that.
Some types of small business insurance are legally required. Worker’s compensation insurance is one of them. This type of coverage is mandatory as it applies when an employee gets sick or injured at work.
If your business has a physical property under its name, then commercial property insurance is something you’re legally required to have. This type of insurance helps protect the furniture, equipment, and even the property itself from theft or a natural disaster.
Known as a business owner’s policy, BOP insurance is a bundle of different types of policies. This is the most common coverage small business owners go for as it has property insurance, general liability insurance, and business income insurance put under one policy.
A type of insurance that has been more popular lately is home-based business insurance. This type of coverage is suitable if you run your business from the comfort of your home. Home-based business insurance is usually combined with an existing home insurance policy as both go hand-in-hand to keep both you and your equipment covered.
No matter how early you are in your journey of building a successful company, taking preemptive measures is a major part of it. Insurance policies are definitely a great solution but only as long as you know what you need and partner with the right company to guide you through the process.