Everything You Need to Know About Small Business Insurance

When starting a new company, most people are focused on developing a winning product or service. Even before registering their organizations, they’re dreaming about massive sales and business expansion. During these initial phases, entrepreneurs don’t give a second thought to insurance. 

However, as you’ll quickly realize, creating a safety blanket is vital for small businesses. With insurance, you’re able to protect your premises from damage, protect your employees from injuries, and cover other risks. Although insurance is an additional expense you have to worry about, you’ll be glad you got one when something bad happens.

What Is Small Business Insurance? 

By purchasing small business insurance, also referred to as commercial insurance, you’re able to insulate your business against various claims and damages. Entrepreneurs often use insurance to protect themselves against legal liabilities, property damage, cyber-attacks, worksite injuries, and other risks.

The best thing about this type of financial product is that you’ll be able to reimburse in the majority of cases. For example, if a person slips in your shop, you’ll be able to cover the lawsuit expenses. Similarly, if someone hacks into your computer system, you’ll receive reimbursement according to damages. 

How to Buy Insurance?

Entrepreneurs must be very selective when buying insurance. Given that there are so many different types of coverage, you can waste a lot of money on protection. You must perform due diligence to avoid unnecessary expenses. 

• Assess Business Risks

Be realistic about the hazards you’re facing. For example, if your region doesn’t get many natural disasters, you probably don’t have to insure your property. Similarly, while cybersecurity insurance is great on paper, there’s a low chance you’ll get hacked during the initial phases of your business. 

• Find the Right Agent

Get your small business insurance from a reputable agent. Find a provider that specializes in small organizations and won’t try to sell you insurance you don’t need. We also recommend you don’t go with the first agent you come across. Instead, compare prices, benefits, and terms from different companies.

• Make Periodic Changes

As your company grows, its insurance needs will change. Assess your policies every year and add/remove insurance accordingly. Seek expert advice to optimize your insurance package and avoid unnecessary spending. 

Different Types of Insurance Policies

Nowadays, a company can protect itself against just about anything. Here are the main policies you can get for your young, small business:

• Business Owner’s Policy

Business Owner’s Policy or BOP is a perfect solution for small businesses. This all-in-one financial product covers various risks and liabilities that small businesses have to worry about. The great thing about BOP is that it’s a highly flexible product, and you can add new types of coverage that fit your needs. 

• Workers Compensations

When your employees get injured in the workplace, you need to cover their medical bills. With worker’s compensation insurance, you’re able to provide your staff with benefits and medical care every time they get sick or suffer an injury.

• Professional Liability

Similar to BOP, professional liability is a customized policy meant to stave off business-specific risks. The stipulations of these policies change based on your industry and whether you’re a private or public organization. Among others, this type of policy helps you in case you give the wrong advice to your clients.

• Employment Practices Liability

If your employees think their rights have been violated in some way, they can start litigation against your business. With employment practices insurance, you’re able to protect yourself against discrimination claims, harassment claims, and so on. This type of coverage will save you a lot of money through lawyer fees and other expenses. 

• Cyber Risk

In this day and age, even small businesses get hacked. Given that most companies nowadays store their data online, a cyberattack would compromise sensitive business information and lead to downtime. Through cyber risk insurance, you’re able to recuperate financial losses caused by hacking.

• Commercial Property Insurance

Commercial property insurance is one of the most common insurance coverage. It protects your business against any damage to your properties, equipment, and buildings. This type of insurance covers your most valuable assets and allows you to stay in business after a fire, earthquake, or some other calamity.

• Medical Malpractice

Medical malpractice is niche insurance tailor-made for healthcare professionals. By getting this type of insurance, you won’t have to worry about litigation costs and compensations caused by malpractice. 

Conclusion

Small businesses have to be extremely careful when getting insurance. Given that these organizations have little money at their disposal, it is crucial that they don’t overspend on different types of risk protection.

When getting insurance, we suggest you take your time to assess different risks. Find the right provider for your business and make changes to your policies as the company grows. For starters, we suggest you get one of the more general policies that will safeguard you against different types of internal and external threats.