The Ins and Outs of Business Insurance
Why do I need business insurance?
- Because you want to protect your investment. There’s always an element of chance involved with a new business venture, but business insurance can help minimize financial risks associated with unexpected events such as the death of a partner, an injured employee, an unexpected lawsuit, or a natural disaster.
- It may be required by law. According to the Small Business Administration (SBA), the law requires businesses with employees to provide particular types of insurance: worker’s compensation, unemployment, and disability insurance, depending upon the state where the business is located.
- It enhances your credibility. Business insurance shows your current and prospective clients that if anything goes unexpectedly awry, they can still count on you and trust that you have a way to compensate.
- Business insurance protects your employees. As a business owner, you’ve got to think about the greater good and the lives of those you employ. It pays to protect them in the event of an accident or disability and it’s a good way to stave off any potential lawsuits or liability claims down the road. It also helps to attract and retain dependable workers.
The future is entirely unpredictable and it’s better to be prepared for the worst-case scenario. Insurance allows you to take a proactive approach to protect your people, assets, and investment from future damage.
What kind of insurance should I get?
Just as every business is different, so are their unique insurance needs. Here are the main insurance types small businesses should consider. (Source: SBA)
General Liability Insurance
- Good for any business.
- Protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds or judgments.
Product Liability Insurance
- Good for businesses that manufacture, wholesale, distribute, and retail a product.
- Protects against financial loss as a result of a defective product that causes injury or bodily harm.
Professional Liability Insurance
- Good for businesses that provide services to customers.
- Protects against financial loss as a result of malpractice, errors, or negligence.
Commercial Property Insurance
- Good for businesses with a significant amount of property and physical assets.
- Protects businesses against loss and damage of company property due to a wide variety of events such as fire, smoke, wind and hail storms, civil disobedience, and vandalism.
Home-based Business Insurance
- Good for businesses that are run out of the owner’s personal home.
- Coverage that’s added to homeowner’s insurance as a rider can offer protection for a small amount of business equipment and liability coverage for third-party injuries.
Business Owner’s Policy
- Good for most small business owners, but especially home-based business owners.
- A business owner’s policy is an insurance package that combines all of the typical coverage options into one bundle. They simplify the insurance buying process and can save you money.
What are the next steps?
Begin by assessing your risks and thinking about what kinds of accidents, natural disasters, or lawsuits could happen to your business. Find a reputable, licensed agent that can help you find policies that match your business needs. Make sure they are going to bat for you, not themselves (they get a commission from insurance companies). Be sure to compare polices in terms of rates, terms, and benefits from a few different agents to better understand the insurance landscape and range of options before you settle on a specific policy.
If insurance woes are getting you down, don’t hesitate to reach out to the support network at GROW. We can help answer any questions you may have related to business insurance, and can even refer you to a number of reputable local agents we work with consistently. Don’t wait until the unexpected happens; protect yourself, your employees, and your business with insurance as soon as possible – and don’t forget – GROW is here to help!