Business owners face various risks, but the right business insurance can help protect them from the unexpected costs of running a business should something go wrong.
Accidents, natural disasters, and lawsuits could run them out of business if they’re not protected with the proper coverage. So, what kind of small business insurance do owners need, and what does it cover? Here are a few helpful tips for choosing the right policy for your small businesses.
The Importance of Business Insurance
As a business owner, you need to carefully consider and evaluate your insurance needs because you may have more personal financial exposure in the event of a loss.
Business insurance, also called commercial insurance, refers broadly to insurance coverages intended for businesses rather than individuals.
Insurance for small businesses protects financial assets and can help pay the cost of lawsuits, property damage, theft, vandalism, loss of income, employee injuries, and illnesses.
For this reason, it is essential for business owners to have insurance to protect themselves.
Insurance Options for Businesses
1. Liability Insurance
Liability Coverage can help protect your company against claims for bodily injury, property damage, advertising injury, errors, or omissions. In addition, without this coverage, you may be responsible for paying out of pocket for legal costs, such as attorney fees and settlement amounts.
2. Workers Compensation Insurance
Workers Compensation gives employees benefits to help them recover from work-related injuries or illnesses. It can also benefit your employee’s families if they lose their lives in a workplace accident. Different factors, such as job risk, claims history, and payroll size, can affect workers’ compensation costs.
3. Property Insurance
Property Insurance covers equipment, signage, inventory, and furniture in the event of a fire, storm, or theft. However, it doesn’t cover mass-destruction events like floods and earthquakes. You’ll need a separate policy if your area is at risk for these issues. According to the Federal Emergency Management Agency, about 40% to 60% of small businesses never reopen after a natural disaster.
4. Business Auto Insurance
Commercial Auto Insurance helps protect you and your employees on the road if you drive company-owned vehicles for business. In addition, it can help cover property damage and bodily injury claims from an accident your business causes.
5. Cyber Liability Insurance
Cyber Liability Insurance helps your business respond to a data breach if identifiable information gets lost or stolen personally. In addition, many policies will include extortion coverage, business income protection, and systems failure, all caused by a breach.
How Much Does Business Insurance Cost?
It’s comforting to know that Mason-McBride is an Independent Agency, so we can shop and compare policies from multiple premium carriers to find you the right approach.
However, it is essential to remember that coverage and pricing will vary based on several risk factors and that no two businesses are the same.
Variables that can affect premiums include:
- Size of business
- Type of business and risk exposure
- Location of business
- Property and assets
- Previous claims history
Steps to Buying Commercial Insurance
It might seem daunting at first to buy small-business insurance – especially if you’re a new business owner – but the process can be made much more manageable if you break it down into these four steps:
When to Reevaluate your Business Insurance
When reviewing your insurance policy, it is best to do so yearly. At this time, you’ll be able to examine your business goals and potential risks to decide if you’d like to renew your policy or switch to another provider. On top of that, you’ll want to reevaluate your coverage if there’s been a significant change in your company.
Whenever you are uncertain about what changes or adjustments you need to make to your policy, your agent will be able to guide you through the process.
Your insurance policy is designed to protect your business, so as your business grows and changes, so will your coverage. If you require an adjustment to your insurance policy but aren’t sure what you need, contact an agent to discuss your company’s needs and how coverage options can be customized.
Basics of Business Insurance: Key Takeaways
The right business insurance can help ensure that both your personal asset and business assets are protected against unexpected disasters.
Understanding your options when insuring your business is an essential first step in obtaining coverage. By speaking to insurance agents, you can determine what coverage makes sense for your business and compare terms and prices to find the best deal for you. Every business is different, so it’s wise to talk to an insurance advisor to guide you through your various options.
Take Action to Safeguard Your Company
Find out how Mason-McBride can help protect your business and request a proposal.
- Decoding E&O Insurance Policy Language
- Cyber Insurance Exclusions
- Business Owners Guide to Cyber Insurance
- Understanding Liability Insurance Coverage
Article By Jamie Parry