Insurance is probably one of the least exciting things you have to deal with as a small business owner. However, you’ve invested a lot of time, effort, and money in your business, so it makes sense to protect that investment with smart insurance coverage. In fact, safeguarding your business assets, your employees, and your livelihood should be an essential part of your business operations.
Consider Your Coverage Options
Business insurance coverage options are available to protect just about every aspect of your business, from employee injury to natural disasters. Several factors determine what coverage you’ll need and the rate you’ll pay, such as the nature of your business, whether you operate from a commercial building or home office, and whether you have employees. Some insurance is required by law or by business associates, such as lenders and landlords.
Here are some of the most common types of coverage that small business owners need to consider:
- Property insurance: This is your best defense against loss from fire, windstorms, and other disasters. Coverage should include your store, office, factory, warehouse, or other facilities, as well as everything from computers and inventory to equipment and tools.
- Business Interruption: Many small business owners fail to think about how they will manage if a fire or other disaster renders their place of business unusable. Business interruption insurance compensates you for lost revenue if your company has to temporarily cease operations due to damage that is covered under your property insurance policy. It also covers operating expenses like electricity that continue when business activities come to a halt.
- Liability insurance: General liability insurance protects your business in the event a customer or other visitor is injured on your property. It also covers legal defense costs if you face a claim or lawsuit for any number of reasons, from your product or service causing harm to unfulfilled contractual commitments. There are a variety of specific liability options available, including Cyber Liability and Employment Practices Liability, so be sure to select the coverage that is right for your business.
- Commercial Auto Insurance: If you or your employees drive company-owned or personally owned vehicles during the course of doing business, you will need commercial auto coverage. Commercial Auto Insurance can get you and your employees on the road again quickly after an accident. It will also protect against losses from injuries to other drivers, passengers, and pedestrians for which you or your employees are liable.
- Workers’ Compensation: When accidents and injuries occur on the job, it’s important that the medical needs of your employees are quickly addressed and they return to work as soon as possible. Workers’ Compensation Insurance can cover your employees’ medical expenses and lost wages arising from work-related illnesses or injuries, as well as reduce potential lawsuits by current or former employees.
- Disability Insurance: For small business owners, a disabling injury or illness could be financially devastating. Several income protection options are available for business owners, including business overhead expense insurance, key person insurance, and bank loan disability insurance.
- Health Insurance: Quality health care is vital to you and your employees. Make sure you clearly understand your responsibilities under the Affordable Care Act, both as an individual and as an employer.
- Life Insurance: If you have family members who rely on your income, life insurance will provide the money they need should the unexpected occur. You also might consider insuring key members of your team who would be difficult to replace. Many lenders require you to have life insurance before giving you a business loan.
Review and Update Your Policies
Obtaining the right type and amount of insurance to protect your organization and employees will help you avoid gaps in coverage where you need it most. However, remember that your business needs may change over time.
It’s a good idea to review your policy annually to ensure that your coverage continues to fully protect your assets. Selecting the right insurance coverage provides peace of mind for you and your clients, allowing you to concentrate on growing your business.
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