You work hard to ensure your small business is a success. You’ve put in long hours, made plenty of sacrifices, and done everything in your power to grow what was once nothing more than a simple dream into a profitable enterprise. But are you covering all your bases by having the right level of business insurance?
Business insurance is crucial because it helps protect you from costly damages or legal claims against your company after an incident. Not having the right level of coverage or any at all could mean paying thousands or hundreds of thousands of dollars out-of-pocket if there’s ever an accident. Here are a few other reasons why small business insurance is so important.
Basic Liability and Property Needs
Although deciding what type of small business insurance to carry is primarily up to you as the owner, there are a few different types of policies that every company typically needs to have for total protection. These are usually the most important ones to have as they provide the most comprehensive level of security.
Business liability insurance helps with the cost of claims made against your business. This can be something as simple as a customer that slips on a wet floor while in your office or an employee accidentally damaging a client’s home while on the job. Not having this insurance would mean that the person making a claim could file a lawsuit against your company, which could end up being much more costly in the long run than paying annual premiums.
Commercial property insurance covers items that your business physically owns. Examples would be the computer equipment in your offices, tools your employees carry while on the job site, furniture, supplies, and other tangible items. The reason why this type of coverage is necessary is that having to replace these items on your own after a theft, fire, or weather event would be incredibly costly. By having adequate coverage, you can rest assured that everything is taken care of if there is ever an incident.
There is a separate option you may also consider called a Business Owners Package (BOP) policy. This type of insurance essentially combines business liability coverage and property coverage together into one. For many small businesses, this is an ideal option to keep from having to purchase them separately.
Employee Protection Requirements
If you have employees, you are required to carry worker’s compensation insurance. This coverage assists your staff if they are injured while on the job. In some cases, this pays for everything from medical bills to lost wages for the time it takes to heal up. In extreme circumstances involving a death, the policy also helps with some funeral costs and final expenses.
Worker’s compensation insurance is a separate policy that is not included in a BOP or your general liability insurance. It is also required in all states for companies that have more than three employees on the payroll, so if you don’t currently carry it, you need to speak to an insurance representative immediately about getting this handled.
Commercial Vehicle Safety and Liability
You already know you need auto insurance for your personal vehicle. But did you know that using your vehicle for business use could void your coverage unless you have specific commercial auto insurance? This is also true when employees drive their personal cars as part of their job. If there is ever an accident, your insurance company could outright deny the claim.
That’s why it is essential to purchasing a commercial auto policy to help ensure you’re covered against an unfortunate accident. Furthermore, this type of policy also assists you if there’s a significant weather event, you hit an animal, your vehicle is vandalized, or if it is stolen.
The exact details of how a commercial auto policy works depend on a variety of factors, including the type of industry you are in, how many employees you have, driving records, and other risk elements. Speaking directly to licensed commercial lines insurance agent is the best way to determine where your organization fits into this picture.
Coverage for Other Needs
In addition to the basics mentioned above, there are other types of insurance available to help protect your small business against certain risks. A few examples include:
Business Income Insurance
This type of policy covers you if your business suddenly has to close due to a covered reason, and you are not able to make sales and/or service customers.
Professional Liability Insurance
Certain occupations have a higher level of professional risk. Giving a client wrong guidance, making a mistake on a project, or another related situation can potentially mean a costly lawsuit later. Professional liability insurance protects you against this in the gap where general liability coverage does not. Examples of common industries this is a good idea for include: law firms, healthcare providers, accountants, graphic designers, and consultants.
Commercial Renters or Property Coverage
Depending on if you own your building or lease it, you should consider carrying commercial renters or property insurance coverage. Commercial renters insurance is ideal for situations where you don’t own the physical building your business is housed in, while property insurance coverage handles any damage to the physical structure itself if you are the owner. Both offer protection and, in some cases, funds to find a temporary office if your current one is damaged by a covered loss like fire or acts of nature.
Conclusion: You Need Small Business Insurance ASAP
There are numerous reasons to purchase small business insurance, as we’ve detailed here. But it really all comes down to one thing: business risks and safety should always be a top priority. By having adequate coverage, you can always feel confident in knowing your company is protected against the unknown.
Selective Insurance is the 41st largest U.S. property & casualty group, providing Commercial, Personal, and E&S Lines coverage throughout their footprint, and Flood coverage through the NFIP in all 50 states.
Selective works with independent agents to understand the unique needs of each Small Business customer, and offer them the opportunity to Be Uniquely Insured.
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