It seems that many of the small business owners who tend ask if they need business insurance are the ones who are not truly familiar with what it really does to protect their business and themselves. For anyone who has been in business for very long, however, they know the question is not “do I need insurance” but rather “how much risk am I willing to take” and “am I adequately covered?” A small business owner struggles with a number of financial realities: slow business, rising taxes and a competitive market. Most realize that not having business insurance or not enough coverage may be the single thing standing between them and potential failure of their business and dreams if an incident was to happen.
What Kind of Small Business Insurance Do Your Need?
A Business Owners Policy (BOP) including General Liability Insurance offers a small business protection from suffering financial loss due to injuries and claims of negligence. These types of claims are not theoretical but are in fact all too common. A customer slips on ice at the front door and claims he can no longer work as a result of the insuring injury. A female employee is mugged in an unlit parking lot and claims she has complained frequently about the lack of safety offered to employees.
Business Property Insurance is also included in the BOP and protects the physical assets of the small business such as the building, the outdoor sign, and the inventory in the event of an incident whether the small business owner owns the building, leases their workspace, or even works at their home.
Workers’ Compensation Insurance: This provides medical and disability coverage for employees for work-related illness or injury. Many independent contractors do not realize they can also take out Workers Comp on themselves. Even though they may have traditional medical coverage it will only go so far in compensating them for time lost should they get injured on the job.
Professional Liability Insurance: This protects a small business if a customer claims to have suffered financial loss because of an error or an omission in the Professional services provided by that business. Suppose a computer consultant programs a business’ computer and the company loses customers records as a result. Such insurance protects the consultant from possible law suits.
Auto Liability Insurance: It is wise for a small business to carry separate coverage on all vehicles used to conduct business. This includes additional coverage for employee vehicles used to conduct business, or autos rented by the insured. There is no way to eliminate all risks when running a small business. But, small business insurance allows a business owner to transfer that risk to the insurance company. The end result is that proper insurance coverage allows the owner to concentrate on what is most important – doing business.
