What Insurance Do I Need for a Small Business?

What insurance do you need for a small business? We hear this question often, but there’s not a simple answer. That’s because the types of business insurance coverage that you need for your small business depends on what your company does and the state you’re in. In fact, state laws require some small business insurance policies and it’s up to you to make sure you have the right coverage.

 

Without the right types of small business insurance, you may have to pay out of pocket for claims. Many small businesses don’t have the resources or capital to cover claims, which means they may not survive. That’s why small business insurance is an important investment for protecting your company.

 

The 11 most common types of insurance that small businesses need are:

 

General liability insurance helps protect your business from claims that it caused bodily injury or property damage to someone else. For example, if a customer slips in your store, this coverage can help pay for their medical expenses. Liability claims from work done away from your location can also be covered under a coverage known as products-completed operations coverage.

 

Many small business owners also get a general liability insurance policy that includes product liability insurance. This can help protect their company from claims of bodily injury or property damage that their products cause.

 

professional liability insurance helps cover claims related to mistakes in the professional services that your business provides. Let’s say your accounting firm makes a mistake on a customer’s financial statement and they have to pay a penalty. If they sue your business, professional liability insurance can help cover your legal costs. Investing in this coverage can help you save money in claims costs. This coverage is also known as errors and omissions insurance or E&O insurance.

 

Business income coverage, also known as business interruption insurance, can help replace lost income if you can’t operate because of covered property damage. This includes damage from fires, storms or theft. 

 

Commercial property insurance helps protect your owned or rented building and equipment used to operate. So, if someone breaks into your building and steals your business computers, commercial property insurance can help cover the replacement costs.

 

Workers’ compensation insurance provides benefits to employees if they get a work-related injury or illness. For example, if an employee gets carpal tunnel syndrome from years of typing and poor ergonomics, this insurance can help pay for their treatment costs. Most states require businesses to have this coverage if they have employees. 

 

Commercial auto insurance helps cover property damage and bodily injury claims if you or an employee gets into an accident while driving a company-owned vehicle for business. So, if your employee swerves off the road while making a delivery and hits a mailbox, this insurance can help pay for the damages.

 

• Notify impacted customers or clients
• Run a public relations campaign to improve your business’ reputation
• Offer credit monitoring services

 

Commercial umbrella insurance extends the limits of certain liability policies that your business has. So, if a claims cost exceeds your policy’s limits, commercial umbrella insurance can help cover the difference.

 

Employment practices liability insurance, also known as employers’ liability insurance, helps protect your business from employment-related claims. This includes claims of:

• Discrimination
• Sexual harassment
• Wrongful termination

A Business Owner’s Policy (BOP) is one of the most popular types of insurance. It combines:

• General liability insurance
• Commercial property insurance
• Business income insurance

11. Hazard Insurance

Small business hazard insurance is another name for commercial property insurance. It helps protect the owned or rented business property, like your building and equipment.

 

The quick answer is yes. Most businesses need liability insurance for small business. But there are several different types of liability coverage to choose from. The most common are general liability and professional liability.

What Insurance Do I Need To Start My Own Business?

• General liability insurance
• Professional liability insurance
• Workers’ compensation insurance

Do All Small Businesses Have Insurance?

• Bodily injury
• Property damage
• Car accidents
• Lawsuits