Every business, large, small, or out of your garage, needs to think about insurance. However, small businesses often aren’t blessed with an entire department that handles insurance matters, so we compiled this list of essential policies that you should consider before settling on an insurance plan.
General Liability Insurance
This insurance is one of the most important you can get for your business. It shields you, your business and any workers from the costs of bodily injury, property damage, and even damages through advertising claims made against your business. Make sure you are aware of the reimbursement limit of your plan and that it makes sense for the needs of your company.
Note that there is a difference between general liability insurance, which protects your company from claims from the public; and workers’ compensation insurance which protects employees on your payroll.
This is a key plan to search for if you are involved in any way with expensive equipment, stock or have a property that is essential to the running of your company. Property insurance will reimburse you for the structure of your business property and its contents if there is any damage to it or if anything is stolen.
Small retailers are highly recommended to consider this option as stock replacement costs at the infant stages of business can cripple the company before it’s gotten started. Additionally, property insurance can cover natural events such as flooding, earthquakes, or fire damage. So these might be additions worth considering if your property is in a region with a higher chance of natural hazards.
Workers’ Compensation Insurance
This is a payout to any employee that was injured at work and is an important plan if you employ anyone for your small business. Injuries can happen anywhere – a sharp corner on a desk, a slippery floor, or something more hazardous like a poorly secured ladder can all lead to injury. Both wage replacement while the employee is unable to work and any health insurance costs are covered by this plan.
High-risk jobs like contractors, painters or anyone who operates heavy machinery are strongly advised to have this backup plan in case of injury in the workplace. This insurance means that the injured employee also cannot sue the company. You can find out more information on workers compensation insurance here.
Professional Liability Insurance
This insurance protects a company from claims against any service that has been performed inadequately whether it is in failing to perform a service or for a service that was incomplete. Sometimes, this insurance is known as ‘errors and omissions insurance.’
This is useful to have professional liability insurance since general liability insurance, as described above, will often not cover damages that occur when a service was not performed. Businesses that provide a specialized service, such as a law firm, a nail salon, or even an insurance agent are the sorts of businesses that should consider this type of coverage.
If you have vehicles specifically for your company, then you will need to get vehicle insurance to cover them. These plans will cover incidents such as vehicle damage and collisions to replacement vehicles if your one is undergoing repairs. This insurance also covers the contents inside the vehicle which is essential if you transport expensive equipment or products.
Some small businesses do not have their own vehicles but instead get employees to drive their own cars or vans for business purposes. It is still worth having a vehicle insurance plan for these cars that are essential to your small business but are not officially owned by the company in case the employee does not have a personal plan that covers company-sized expenses.
If your business is largely operated from your home and you do not rent a property commercially, then a good home insurance plan may be best suited for you. This is similar to property insurance but pertains to personal property rather than commercial property. Some natural damages are covered by this, such as lightning strikes and windstorms, but there may be additional charges for fire and floods.
This is a good starting point when contemplating insurance for your small business. It can seem like a huge task, but consolidating all of your insurance plans and knowing where you are covered can smooth over hiccoughs quickly.