Types of Insurance You Need to Protect Your Small Business 

There are several ways to protect your business and all the hard work you have put into it. Perhaps the most important thing you can do is to make sure your business is adequately insured with the proper types of insurance plans. A recent N.Y. Times article reported 40% of small businesses in the U.S. to have no insurance whatsoever, while the SBA estimates between 36-53% of small businesses are involved in at least one lawsuit in any given year.

Small business meeting

Small businesses are vulnerable to all types of risks, but with the right protection, these can be diminished considerably.

Protecting Your Business & Your Workers

Of all the types of small business insurance plans, one that is required by most states is Workers’ Compensation. This is a mandated insurance policy that not only protects your employees in case they are injured or get sick at work but protects your business as well.

When employees are covered by Workers Comp, their right to sue their employer for injuries or sickness occurred on the job is automatically relinquished and deemed as unnecessary. The employers’ cost of providing workers’ compensation coverage generally varies according to levels of risk, business classification, and experience rating.

Protect Your Business Property

If you own the building that houses your business, you should obtain a Commercial Property insurance plan that not only covers the business structure but also all the items within, such as furniture, electronics, copiers, tools, computers, etc. This will provide you with some peace of mind in the event there is a fire, theft, vandalism, smoke or water damage, or other natural disasters. It can also help to recur the loss of stolen business property.

Umbrella Coverage

Business Owners’s Policies, or BOP’S, are popular in today’s business world because they can bundle all required coverage a business owner would need under one umbrella, thus reducing the overall cost of coverage compared to if you were to purchase individual policies. A BOP typically protects business owners against property damage, business interruption, and liability. While different coverage options may vary among providers, businesses can tailor the plan for their needs, such as adding for additional coverage for crime, flooding, merchandise spoilage, forgery, etc.

Not all businesses qualify for business owner’s policies. Eligibility requirements can vary based on the location and size of the business, it’s revenue, and the business class type.

Insuring Your Vehicles

If you operate a type of business that requires the use of vehicles for business use, such as repair service or construction business, obtaining Commercial Auto insurance is a must. With commercial auto insurance, you can protect your work cars, vans, and trucks from all types of damage and collisions. If your employees drive their own vehicles for company business, you should have a non-owned auto liability policy to protect the business in case the employee has no insurance or an insufficient policy.

Having the proper insurance for your business is key to becoming a successful entrepreneur. Whether you are a one-man/woman operation or have several employees under your belt, it can protect you from the risk of losing everything you have worked so hard to achieve.


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