08 Feb Five Coverages Every Small Business Should Have
Overlooking key insurance needs for a small business can become detrimental for a business’ survival. What they don’t know can, in fact, hurt them in the long run and even unexpectedly close their doors.
To stay open after a fire, flood or hurricane; to avoid paying the price of a failed service or a damaging product; to avoid major financial loss after a lawsuit; to easily replace stolen property; and most importantly, to relax during business operations on and off their premises — here are five types of insurance coverages every small business should have in place:
General Liability
Regardless if a company is owning or leasing an office building or working home-based, they need general liability insurance. If their company, their employees, products or services ever cause any damages or injuries to a third party, this will provide protection. In addition, commercial excess liability should be considered, because claims often exhaust the limits of the primary general liability policy.
Commercial Property
Equipment, computers, tools, furniture and all the other important items a company needs to operate should be protected. Whether a fire, vandalism, storm or smoke damage occurs, the contents of the building, the building itself and other people’s property involved in the loss can be covered. In addition, the loss of income resulting from a property loss can also be insured. Commercial Property can’t go overlooked.
Commercial Auto
Whether a small business owns autos or not, there is significant risk exposure any time an owner or employee uses a vehicle for business purposes. In case of an accident, the employees, passengers, work gear and all equipment in the car will have to be sufficiently covered.
Cyber insurance
We live in an information-driven society, and if a small business owner believes they’re left out of the cyber risk-zone, they are sadly mistaken. Hackers don’t just go after high-profile, high-revenue businesses. They are out to get what they can. With data breach recovery and required breach notifications being extremely expensive, cyber insurance should be in place. Protecting sensitive data online, including the private information of a customer, the employees and the overall company should be a priority.
Workers’ Comp
Workers’ Compensation insurance policy provides compensation to employees for injuries and illnesses arising out of and in the course of employment. This policy typically provides payment for medical treatment, temporary and permanent disability and death benefits. Workers’ Comp is required in almost every state.
+ 1 : Professional Liability
I know we said five but many small businesses have a professional liability exposure. When a small business, such as an appraiser or barber, is negligent or fails to perform their services, they have an exposure to lawsuits. Different than other types of insurance, professional liability, also called errors and omissions insurance (E&O), protects a business if they are sued for negligently performing a service — even if they haven’t made a mistake.
With insurance, it’s all about properly limiting a company’s exposure to risks. This means a company’s insurance coverage should be strategically based on their operations and types of assets. Every owner must understand that although commercial insurance may seem expensive, the benefits far exceed the cost.