An insurance policy is the real-life manifestation of the “better safe than sorry” saying. It’s a way to set aside some money for dark days (whenever they may arrive), to make sure you won’t be caught by surprise.
However, when the budget is tight (as is for most entrepreneurs), it’s difficult to think about setting something aside. Still, considering the level of risk entrepreneurs face, it wouldn’t be fair for your future development to forgo this step.
As such, today we are going to discuss the top 3 most important types of insurance for small businesses, and why they matter.
Know Your Needs [Now & for the Long-Term]
The insurance market is rich in a variety of options. From health to home to pet insurance, there are lots of policies you can take.
Still, it doesn’t mean you should.
As an entrepreneur or the owner of a small business your budget is already stretched thin (in most cases), so you can’t afford wasting money on policies that won’t support your efforts to grow and expand.
Luckily, there are platforms (like PolicyScout.com) that can help you find the coverage that’s best for your needs.
The key word here being “your needs”.
This means you will have to observe and analyze your current position and what you hope to achieve in the long-term. Once you have a list of solid objectives and goals, you’ll also know which sections of your life & business need insurance.
3 Types of Insurance for Entrepreneurs
#1: General Liability Insurance
Regardless of the fact that you work from home or have a separate office space, your business needs general liability insurance.
The policy covers defense and damages in case your business (you or your employees) gets involved in a bodily injury or property damage case to a third party.
#2: Property Insurance
This one is designed to protect the properties assigned to your business (buildings, office equipment, hardware, or other tools) in case of fire vandalism, theft, or other bad situations.
You can also add a policy for protection in case of interruption of activity or loss of earning (for those scenarios when the business can’t operate). The latter is not attached to the first, but it’s a good idea to keep in mind.
#3: Business Owner’s Policy
Also known as a BOP, this is a package that covers almost any scenario a business may need insurance for. As such, a Business Owner’s Policy includes property insurance, liability insurance, and interruption of activity insurance (among others).
The good thing about a BOP is that you can customize it according to your business’s needs. As a result, you can save money, since you’ll receive these services as a bundle (which is more affordable than individual coverage).
Insurance coverage is a must-have for every type of business, especially in a time when it’s not exactly sure where we’re going.
Times are tough, especially for businesses that have direct contact with customers (such as hairdressing salons, brick-and-mortar retail stores, travel agencies, and more).
As such, it’s best to consider your options before the business becomes a real entity. This allows you to plan ahead and include the policy in the initial budget plan.