7 Essential Types of Insurance For A Small Business Owner
As a small business owner, you know that your business is your livelihood. But you may not be aware of the various types of insurance available to protect it. It might seem like paying for multiple policies you may never need to use is a waste of funds; however, if you encounter a problem, the assistance from your insurance provider can be invaluable. That being said, insurance trends can change, times change, and businesses evolve. Check on Artificial for recent updates and changes in the insurance industry.
This article will outline different types of coverage you should have in place for your small business.
Professional Liability Insurance
Professional Liability Insurance is essential coverage for your small business. It covers you if you are sued by or have liability due to professional negligence while practicing your profession.
For example, if you’re a freelance writer and someone claims that the article they read on your website caused them physical harm, Professional Liability Insurance would cover the cost of defending yourself against this claim.
General Liability Insurance
- What is it?
General liability insurance covers you for the costs of property damage or bodily injury that you might cause others. This includes things like slip and falls, defective products, and more.
- Why do I need it?
You need this for two reasons. If someone were to sue you. Or (if someone sues you on behalf of your business), this would cover your legal fees as well as the cost of settlement. General liability insurance can cover legal defense expenses if a suit is brought against you by an employee or customer.
- How much should I buy?
Depending on the nature of your small business, this can vary widely from one thousand to five million dollars worth of coverage. However, as a general rule, it’s best to buy as much as you can afford so that there are no surprises should you ever have a claim filed against your company.
Property Coverage
If you own or lease any of your own equipment, property, or inventory, you should have a policy in place to cover those assets. Damage to your building and its contents can happen due to various circumstances.
For example, if there’s a fire, you’ll need coverage to replace the damages. But what about when someone breaks in? Do you have coverage for that? This is where burglary insurance comes into play. You might not think it’s necessary, but chances are your building will be burglarized at some point in time. You need to have the right coverage in place so that when this happens, you’re left with minimal costs and stress.
There are many different types of property coverage available for a small business owner to consider purchasing. It all depends on your specific needs and goals for your business, as well as the amount of risk you’re willing to take on financially. You can speak with a licensed agent at Liberty Mutual Insurance Services LLC about which type of property insurance is best suited for your business.
Business Income Coverage
Business Income Coverage is an essential policy for any small business owner. It pays out when your company has lost income due to not your fault factors. You could lose money because of a natural disaster or because of another casualty, like theft or vandalism.
Your insurance provider will pay out on your Business Income Coverage based on the percentage you decide to calculate your loss rate. For example, suppose you have a loss in revenue of $50,000 and were insured for 75% of the business’s total value. In that case, it covers 75% or $37,500-your company would receive $25,000 in compensation from the insurance company to make up for the losses.
Workers Compensation Insurance
If you have employees, you’ll need to acquire workers’ compensation insurance. All 50 states require this type of insurance. It protects you against injuries and illnesses that result from on-the-job activities.
Data Breach Insurance
Not too long ago, Equifax announced that 145.5 million Americans’ personal information had been compromised in a data breach. This is one of the largest hacks in history, and, unfortunately, it’s not the only one.
Data breaches are becoming more and more common, so it’s essential to have insurance in place to cover the cost associated with a potential data breach. You might be wondering why your policy would need to cover this if you don’t store any personal information on your small business website or intranet?
Most people are unaware of how much data they actually hold on employees and customers. And they definitely don’t know how sensitive data storage can be. Data breach laws are becoming more strict. So, it is better to err on the side of caution. Have data breach protection as well as robust cyber security.
Commercial Property Insurance
Whether it’s rented or purchased, you need to ensure that your investment is covered if you own business property. This includes the walls, floors, ceilings, fixtures, and even furniture.
Commercial Property Insurance will protect your business against damage or destruction of your by fire or other covered perils. It also covers the loss of use of the property caused by the threat.
This type of policy typically has a deductible amount for each claim to cover the cost of repairs after a natural disaster. Many policies offer additional coverage to repair any damaged equipment or inventory. Especially if it’s not already included in your policy.
Conclusion
When taking out an insurance policy, always read the small print. And make sure that the payout will cover any claims you may make. Always seek professional advice if there is something you don’t understand.
