As a small business owner, you wear a ton of different hats. One moment, you’re a salesperson. The next moment, you’re an accountant.
You have so much going on that it’s easy to overlook some crucial things about your business, such as insurance. A lack of insurance can put your business at risk, whether because you’re sued or an unexpected pandemic.
Read on to learn about the types of business insurance you need and how to protect your business from almost every eventuality.
1. General Liability
What would happen if someone came to your property and tripped over a cord and injured themselves? In all likelihood, you’d get sued.
According to the Small Business Administration, a civil lawsuit can cost a small business as much as $150,000. That would put many small business owners at risk of completely shutting down their business.
A general liability policy would protect your business in this situation. In some cases, it may cover a customer’s property that was damaged by you or a representative of your business.
2. Errors and Omissions
This is commonly referred to as E&O insurance or professional liability insurance. This is geared towards service providers. Your customers depend on your advice and expertise, and there are times when you’re wrong.
For example, you’re an attorney who provided advice to a client, but overlooked an important piece of information in dispensing your advice. You could get sued for that.
Personal trainers could give someone a specific workout that makes them sick or triggers an existing condition. That could leave you liable in a lawsuit.
There are professional liability policies that cover specific industries. Salons, spas, and tattoo parlors are examples of these types of policies.
3. Cyber Insurance
Cyber insurance is a new type of insurance policy for small business owners. Don’t think that you don’t need this because about 43% of all cyber attacks happen to small businesses.
A cyber attack could cost your business as much as $200,000 that you probably can’t afford.
You may be covered if you have to pay a hacker for a ransom attack. It may also cover lost income and the costs associated with lost data and equipment. Some policies go as far as to cover brand reputation recovery and regulatory fines.
4. Home Office Rider
If you work in a home office or store inventory at home, don’t assume that your homeowner’s policy is enough. It’s not.
Your business is separate from your personal belongings. That means you’ll need a separate business policy. Not taking this step could leave you exposed if a client comes to your home and has an accident or you lose equipment and inventory.
5. Worker’s Compensation
Worker’s compensation is a must if you have employees working for you. Most states require that you carry worker’s comp as soon as you hire your first employee.
This is a type of insurance that is overseen by state labor boards but sold by private insurance companies.
Worker’s compensation gives your business protection if an employee is injured on the job and can’t work. The employee agrees not to file a lawsuit against your business in exchange for worker’s compensation insurance.
6. Property Insurance
Do you have your business located on a property that you own or rent? Property coverage will help you if your business suffers a burglary or fire. However, property insurance doesn’t cover natural disasters, such as earthquakes or floods.
7. Auto Insurance
Auto insurance is a must if you have company cars that your employees use. This is common for service businesses like plumbing or landscaping.
Your business will be covered if your employee gets into an accident in your vehicle. If you have employees run errands in their own cars, then their personal policy will cover them.
8. Product Liability Insurance
Do you sell or manufacture products? Product liability insurance can give your business coverage in the event that someone is injured by using that product.
Your business may be covered for medical bills, lawsuits, and some manufacturing defects.
9. Business Interruption Insurance
Let’s say that there’s a pandemic that no one saw coming. It forced many businesses to shut their doors for weeks to curb the spread of the disease.
How could you possibly make up that lost revenue and pay your staff and bills? That’s the question that many business owners are asking themselves in the face of the coronavirus pandemic.
Business interruption insurance may be able to cover your losses. This situation is new for business owners and insurance carriers alike. It remains to be seen how these policies will cover businesses.
10. Business Owner’s Policy
As you can tell, there are many types of small business commercial insurance. You may be looking over the list and think that there’s no way you can afford all of those premiums.
A business owner’s policy is a type of insurance that packages several different policies into one affordable policy.
Keep in mind that it’s not available for all businesses and you want to find out which insurance plans can be included. Usually, you’ll find property, liability, and business interruption.
You’ll need to check with your insurance company to find out how they handle the business owner’s policies and what the costs are.
11. Keyman Insurance
Who does your business rely on the most to operate every day? You’re most likely one of those people. There may be others in your business who are indispensable.
If so, then you want to have insurance in place in the event that you or other key people in your organization can no longer work.
Keyman insurance is a little similar to having life insurance, but this policy is specifically for your business.
Protection for the Small Business Owner
A small business is a source of pride because of the hard work it takes to make it successful. A small business owner needs to do everything possible to protect the business from unexpected events, natural disasters, and expensive lawsuits.
Small business insurance can provide that protection, as long as you have the right policies and amount of coverage.
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