Last updated on June 14th, 2023 at 11:28 am
While we can’t prevent the unexpected from happening, we can get some protection from the costs associated with unforeseeable events and accidents. Purchasing the right kind of insurance can go a long way with offsetting your personal and professional fees. However, determining when you’ll need insurance and what should be covered is a whole other issue.
When Will I Need Small Business Insurance?
Small business insurance isn’t mandatory for you to operate a business, neither is personal insurance, but it can protect you from common risks you may encounter. As an integral part of your risk management strategy, you should find insurance that protects you from financial losses that occur from break-ins, natural disasters, data breaches, and employee illness.
Types of Business and Personal Insurance to Consider
While most business and personal insurance can be an expensive investment, it can save you thousands of dollars when disaster strikes. When you have the capital, consider these options:
As a small business owner, you’ll need to prioritize coverage that will support you and your family if you fall ill, develop a long-term disability, get in a car accident or die unexpectedly.
- Life Insurance: Pays a death benefit to the policy owner when the insured dies.
- Health Insurance: Covers medical expenses up to a certain policy amount.
- Long-Term Disability Coverage: Covers daily expenses if you become disabled.
- Auto Insurance: Covers medical insurance payments for both you and the other driver if you’re in an accident. Also protects against theft, vandalism, and natural disasters.
Personal insurance safeguards you financially from multiple circumstances, but if you’re having a hard time finding an insurer speak to PolicyScout. PolicyScout is disrupting the insurance sector by providing its customers with hundreds of guides, including in-depth reviews, on who offers the best coverage. They’ll match you with multiple insurance companies in your area.
The following business insurance examples can help protect you against any risk you may encounter. However, only worker’s compensation is mandatory in most states.
- General Liability Insurance: Protects your business location from property damage.
- Product Liability Insurance: Covers legal costs when a business product causes harm.
- Professional Liability Insurance: Covers legal costs when a service causes harm.
- Business Income Coverage: Covers expenses and losses that occurred during a covered incident. For example, floods and many other natural disasters are “covered.”
- Commercial Property Insurance: Protects physical business property against theft.
- Workers’ Compensation Insurance: Businesses with employees are legally required to buy this insurance, which covers when an employee is sick or injured at work.
- Home-Based Business Insurance: Businesses that operate out of the owner’s personal home can add this to their home insurance. Similar to general liability.
- Cyber Liability Insurance: Protects against cybercrime and compromised data.
Depending on the nature of your business, you may need extra coverage. For example, healthcare facilities may require umbrella insurance, which protects against major lawsuits.
How to Find The Best Insurance Rates
While shopping for the best insurance coverage, companies and rates, always:
- Find a licensed agent. Licensed agents are well-trained, have connections to private insurers, and have up-to-date knowledge on the best rates available. They can also help you determine what your business needs and will find a policy that suits it.
- Shop around. Don’t just settle on the first option you see. Compare rates and contact multiple insurance companies to ensure you’re adequately covered.
- Know your risks. Although a licensed agent can help protect your business, they don’t know your company as well as you do. Consider if you’ll need natural disaster coverage, worker’s compensation, or auto insurance for company vehicles or delivery trucks.
- Reassess coverage regularly. As your business scales, your insurance needs will change. If you move, take on employees or sell internationally, you’ll have to reassess.