Small Business Insurance

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Also referred to as commercial insurance, small business insurance protects your business interests in the event of any challenges. Without the proper insurance coverage, over seven million small businesses in the US can be eradicated by a lawsuit or disaster. Therefore, every small business needs commercial insurance to protect itself from risk. How do you choose the right small business insurance? Below is a small business insurance guide for beginners, including finding the best small business insurance.

<b>What Is Small Business Insurance?</b>

What Is Small Business Insurance?

Small business insurance is generally insurance that you take to protect your business's assets, income, and property. It protects against property damage and bodily injury. The most common type of small business insurance is the Business Owner's Policy (BOP).

The business owner's policy combines three basic coverage types for a business's protection. These include:

  • General liability coverage
  • Business property coverage
  • Business interruption coverage

However, as a diligent small business owner, you may purchase additional coverage to ultimately personalize your insurance policy based on your business needs and preferences. Only small to medium-sized businesses that meet particular criteria are eligible for the business owner's policy. 

Insurers typically consider particular factors such as premise size, the required liability limits, the business type, and the extent of offsite activity. BOP policy premiums are based on these factors and much more such as:

  • Financial stability
  • Business location
  • Security features
  • Building construction
  • Fire hazards

What Does Small Business Insurance Cover?

Commercial insurance covers claims that your business has caused damage or harm to a third party's property and wellbeing, respectively. Additionally, small business insurance protects your business's income and equipment from disasters such as wind, fire, theft, lightning, and falling objects. It is vital to diligently read through your policy documents to understand what is and what is not covered.

Types of Small Business Insurance

What type of small business insurance do you need for your business? Acquiring a business owner's policy is convenient and saves you money. However, different types of small business insurance exist, including the coverages under the business owner's policy.

These small business insurance types include:

General Liability Insurance - This coverage is part of your BOP, and it protects you against liabilities related to property damage or bodily harm. The policy can cover slander and libel claims. If a customer is hurt inside your business premises, general liability insurance will assist in paying for their medical expenses if you are held liable.

Business Property Coverage - This coverage protects your commercial building and its contents against covered disasters. For example, if your building catches fire, the property coverage helps to pay for building repairs. Business property coverage facilitates replacing business property such as machinery, computers, or office furniture.

Business Income Insurance - Business income insurance is also known as business interruption coverage, which is part of a business owner's policy. This helps to replace lost income due to theft, fire, wind damage, and other covered perils. It helps you pay your lost revenue if you have to temporarily shut down due to unfortunate events.

Worker' 'Compensation Insurance - This provides applicable benefits to your employees if they sustain work-related injuries or illnesses. Workers' compensation insurance helps pay for medical care, funeral expenses, disability benefits, and lost wages if your workers need time off to recuperate.

Commercial Auto Insurance - Commercial auto insurance is recommended if you have employees driving for your business. It covers accidents that are caused by your drivers to third-party persons or property.

Professional Liability Insurance - Professional liability insurance protects your finances if either you or your employees make an error in the professional services you provide. It is also commonly referred to as errors and omissions insurance.

Why Do I Need Insurance for My Business?

It is recommended to have insurance for small businesses since the financial consequences of a potential happening could wipe out your small business assets. Small business owner insurance provides protection if third parties sustain injuries or property damage due to negligence.

Is Business Insurance Required?

According to the US Small Business Administration, the federal government requires employees' compensation, disability, and unemployment insurance. However, choosing other policies is at your discretion.

Do I Need an Insurance Agent Who Specializes in Small Businesses?

A highly skilled insurance agent should be able to find you the best kind of insurance. However, though not mandatory, hiring an agent who understands everything about small business insurance is advisable.

In Conclusion

Small business owner insurance helps you to protect your business interests and finances. It helps you minimize the extent of your liability.

Are you looking for the best small business insurance? Do not navigate the process of finding commercial insurance alone. Work with our professionals to review the best options with varying business insurance cost prices.

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