Insurance is often not high up the to-do list for small businesses, mostly because they operate on a tight budget. As such, small business owners tend to postpone getting insurance for their organizations because they think it is costly.
Ignoring or postponing purchasing insurance for your small business is a risky venture that may cost you more in the long run.
Several types of insurance are required by law, and there are others that small businesses need to forestall eventualities. It is best to make strategic decisions on which insurance policies your business needs based on the industry in which you operate.
If you are looking to secure small business insurance, but you don’t know how to go about it, this article is for you. Find out how insurance works and why you need it for your small business.
What Is Business Insurance?
Business insurance exists to provide you and your business a buffer from losses incurred through accidents, thefts, lawsuits, and others.
This buffer ensures that your small business can keep running in the event of such losses.
Types of Business Insurance
There are several types of insurance available for small businesses; some are tailor-made for specific situations, and there are broad insurance policies that cater to a host of circumstances.
The best business insurance plan will depend primarily on your type of business and the industry. Below are listed some of the business insurance policies that your small business will need.
A general liability insurance policy is a type of business insurance that offers both defense and damages in the event where you, an employee, or your products or services is deemed to have caused some form of bodily injury or property damage to another person.
All small businesses should have this type of insurance.
This type of insurance policy covers damages to buildings or business property in the event of theft, vandalism, fire, and other such mishaps. This ensures that all damage that affects your business properties are catered for.
It is also advisable to add a loss of earning insurance policy to this if damages make it impossible for the business to operate and your income is sorely affected.
Commercial Auto Insurance
As the name suggests, this insurance policy caters to the vehicles that your business owns. This encompasses vehicles that transport equipment and employees. These vehicles are insured from damage and collisions.
If you do not own a company car, but your employees use their own cars for business purposes, you can have a non-owned auto liability package that will shield the company where the employee is not covered by insurance or has an inadequate coverage plan.
This is an insurance package that offers employees who get injured on the job insurance benefits. It provides medical benefits and wage replacement for employees who get hurt in carrying out their duties. For this to work, the employee in question will have to give up the right to sue the employer and get the insurance policy’s benefits in return.
It is important that as a business owner, you have such an insurance policy to insulate yourself and the company from such legal snags. Though state laws may vary on the subject, by law, it is required that you have such a policy in place. There are severe penalties for not complying with this directive.
Also known as the Errors and Omissions Insurance, this policy serves as a buffer when you fail to render a professional service properly. It provides support if you make errors in the line of duty. This is specific to your professional capacity to provide a service and is not covered by a general liability policy. Any profession that offers services should have one.
If you are a small business owner, you should seriously consider getting one or more of these insurance policies to provide adequate insulation for you and your business in the event of a mishap.