When you’ve started a small business and poured your blood, sweat and tears into it, protecting your hard work is vital. Actually, it’s unquestionable. You’ve taken care of budget, branding and marketing are working together and your website is starting to bring in the clients. Things are swinging into action perfectly. But without the appropriate business insurance, you could be making a risky move as a small business owner.
Successful entrepreneurs understand that there are so many variables involved in running a business. Industry fluctuations, natural disasters, data loss and downtime can drag you under in an instance and change your business direction. Risks are an inevitable part of being a business owner, but protecting your biggest asset should always be a top priority. Here are the top business insurance covers you should be investing in for your small business needs:
General vs. Professional Liability Insurance
Both of these insurance types are essential in protecting your small business. General liability will cover the basics, defending against damages to your products, services or employees by a third party and vice versa. This level of insurance includes both property damage and injuries sustained to the body. One of the biggest benefits of general liability is the extras that are generally included in the insurance. Policies can protect against medical expenses and the legal costs of defending lawsuits.
On the flip side, professional liability insurance covers that little bit extra to ensure your business is fully protected. If your business engages with clients and does work where something could go wrong, or if there’s a chance your business could be sued, then professional liability is vital. If a project doesn’t go to plan and the client sues, it’s this level of insurance that helps to cover legal fees and defence costs.
General Business and Office Insurance
The devil is in the details and when it comes to business, sometimes it’s the little things that can make all the costly difference. General business and office insurance is your knight in shining armour. This will cover your business and all its activities including office environment and anything else relating to your job as an office based professional. Taking out general business and office insurance also protects you and your building from water damage risks, burglary, accidental damage, portable electronic equipment and business interruption.
Business interruption insurance, in particular, is something small business owners shouldn’t skimp on. Downtime is costly and frustrating, so eliminating loss of income during those times should be a priority. Entrepreneurs that don’t make this investment can end up forking out money (and a lot of it) for costs to get the business back up and running. This can include claim preparation costs and losses from damage to your business property, damage to the customer’s premises caused by someone in your business or damage to a suppliers premises.
If business is suffering from downtime due to property damage, wages and reoccurring expenses still need to be paid. And covering them out of your pocket isn’t the most practical option. Business interruption insurance benefits small business owners by covering loss of gross profit. It won’t protect loss of income – you’ll need to take out income protection for that – but by providing gross profit, you’re in a better position to get your business back to how it was.
Workers’ Compensation
It doesn’t matter whether you have two people working for you or 200, employee safety is important. From the moment you first have an official staff member working with you, workers’ comp is required by the law. If an employee is injured or sick as a result of their job with your business, loss of wages and medical expenses are covered under workers’ comp.
Before taking out this insurance, it’s important to check with an insurance broker about which policy applies to you. The requirements for workers’ comp differ between state, which can leave some business owners without the right cover if prior research isn’t done first.
Choosing the right business insurance for your needs is no one size fits all solution. Adequate research and planning are needed to find which policies and covers best reflect your industry. This is the first step to determining what needs to be done to protect your business and the people and assets in it.
