Business insurance provides peace of mind, saving you from unexpected expenses. You cannot control Mother Nature, and not all accidents and lawsuits are preventable, either. Learn more about how to insure your small business adequately.
Picking the Right Type of Business Insurance
Depending on your business structure, your insurance needs will vary. And while a limited liability company (LLC) status secures your business against most personal property-related lawsuits, there are other factors to consider, potentially including:
- Workers’ comp
- Unemployment
- Disability insurance (DI)
The Six Primary Types of Business Insurance
General Liability Insurance
General liability insurance is typically ideal for any type of business, protecting against financial losses resulting from injuries, property damage, lawsuits, medical costs, and other unexpected occurrences.
Product Liability Insurance
Product liability insurance is a must for companies that specialize in manufacturing, selling, or distributing products.
Professional Liability Insurance
Professional liability insurance protects businesses providing services to their clientele.
Commercial Property Insurance
Does your business have a substantial amount of physical assets or property? If so, commercial property insurance is crucial.
Home-Based Business Insurance
Home-based business insurance is pretty self-explanatory.
Business Owner’s Policy
A business owner’s policy generally bundles insurance coverage options, simplifying how you choose your carrier and plan.
Four steps to buy business insurance
- Assess your risks. Think about what kind of accidents, natural disasters, or lawsuits could damage your business. Is your business located in a commercial area that is at risk from seasonal events? Commercial property insurance will help protect against loss.
- Find a reputable licensed agent. Commercial insurance agents can help you find policies that match your business needs. They receive commissions from insurance companies when they sell policies, so it’s important to find a licensed agent that’s interested in your needs as much as his or her own.
- Shop around. Prices and benefits can vary significantly. You should compare rates, terms, and benefits for insurance offers from several different agents.
- Re-assess every year. As your business grows, so do your liabilities. If you have purchased or replaced equipment or expanded operations, contact your insurance agent. You should discuss any changes in your business and how they affect your coverage.
Protecting Your Business Against the Unknown
While insuring your small business can be expensive, it can save you tens of thousands, if not millions, of dollars in the long run. Additionally, it is illegal to operate many types of businesses without the proper insurance policies in place.
