Picture it: You’re a small business owner who opened up a shop in your local business district. One morning as you’re mopping the floor, a customer walks in. All is well until they slip, fall, and break their arm. The customer doesn’t have health insurance, and before you know it, you’re getting sued to cover their medical expenses and more.
的se bizarre twists of fate do happen and can seriously harm the health of any type of small business—includingecommercebusinesses—and they can shutter your business, fast. Small business insurance coverage, when tailored to who you are and what you do, can help protect you from a full gamut of random events that are out of your control. These are key steps that can take you from assessing your insurance needs to finding the right policy that saves you time and stress—while helping to protect your bottom line.
How to Get Business Insurance
1.Understand how insurance can help
2.Review different types of business insurance
3.Assess business risk
4.得到quotes from business insurance providers
5.Review, customize, and purchase your policy
6.Review and reassess your policy annually
1. Understand how insurance can help
It’s a common misconception for people to think that since their business is small, it doesn’t need insurance. But small business insurance can fundamentally serve you and your venture in multiple ways:
- It protects your assets.This includes your equipment or building if a theft or natural disaster occurs.
- It provides reimbursement.Insurance plans can reimburse you for funds that you would have earned if unforeseen circumstances, like a cyberattack or burglary, stop your business from functioning properly.
- It helps protect you from lawsuits.As heard with stories of slip and falls, insurance provides protection from liability claims.
- It closes coverage loopholes.If you run your business from home, you may assume that your homeowners insurance would cover a business emergency—but it doesn’t. For example, if making and selling a product out of your garage and the garage floods, your homeowner’s insurance wouldn’t cover the cost of the destroyed products. However, asmall business insurancepolicy would provide coverage.
2. Review different types of business insurance
If sold on the fact that you need insurance, you still have to pick the type that is right for your business. Some of the most common types of insurance that small businesses choose are:
- General liability．This coverage protects your business from lawsuits stemming from bodily injury or property damage. If you’re a contractor, this can also be a requirement to perform work in certain spaces.
- Commercial auto．This protects your business if you or one of your employees is in a car accident while driving on the job. General car insurance doesn’t always cover this.
- Workers’ compensation．If you have employees, workers’ compensation insurance is required by law, though details and regulations differ state to state. Workers’ compensation protects you by providing benefits to an employee who injures themselves on the job and must be out of work for a period of time. If an employee gets hurt and you don’t have workers’ comp, you could find yourself eye-deep in fines for noncompliance.
- Cyber liability insurance.Cyber liability insurance protects you if there is a data breach in your records or if information that keeps your business afloat—think strategic plans, client lists, or banking records—are ransomed. It also covers legal fees if a customer sues you for a data breach.
- Professional liability．This type of insurance covers you if you provide professional services to a customer and they sue you for an error. This is commonly used by doctors and other medical professionals as medical malpractice insurance in case a procedure goes wrong.
- Business interruption.This insurance is utilized when something beyond your control halts business operations. For example, if an office fire caused you to work out of an alternate space, business interruption insurance would cover the loss of revenue that your business had because of that interruption, along with rent payments, loan payments, and even quarterly tax payments, depending on the scenario.
- Commercial property.与this coverage, your physical workspace is protected from damages caused by natural disasters. It can also reimburse for vandalism or theft.
- 企业主的政策(BOP)．防喷器通常包商业地产,总的来说al liability, and business interruption insurance coverage.
3. Assess business risk
Not every business needs every type of insurance. If you’re a business of one as an accountant and work from home, it may be wise to get a professional liability policy, but unnecessary to buy workers’ compensation. On the other hand, some types of businesses just have greater risk baked into them. Some factors to consider when evaluating which insurance is the right fit:
- Work environment.Is your workplace accident-prone? Do you use heavy machinery with a few employees? Workers’ compensation insurance is a must.
- Digital footprint.Do you conduct all of your business from your computer? What are your contingency plans if your computer is hacked and you are left unable to work? In this case, cyber insurance is your best bet.
- Physical workspace.Is there a physical location that members of the public will enter? If so, you’re going to want general liability insurance.
- Regional weather.Is your business located in an area that is prone to natural disasters like floods, hurricanes, or tornadoes? Commercial property insurance would protect assets destroyed in a disaster.
Also, collecting and organizing your business information at this stage can help in gauging risk to determine the most suitable type of insurance coverage. Questions you may ask yourself include: What is the value of the assets needing protection? How much business revenue and expenses are projected for the year? How many employees are there? Business records on payroll, accounting, assets, and number of employees may be requested when starting the insurance process. These documents may show business location, annual sales, tools and equipment, and leasing agreements, among other details. It can be tricky to rope this information together quickly without notice, so starting early is the best approach to being ready for policy enrollment or if a claim is filed.
4. Get quotes from business insurance providers
It’s your choice how you want to gather insurance quotes—work with a broker, comparison shop through a third-party website likeInsureonorSimply Insurance, or contact an insurance provider directly. If you do choose to work with an insurance broker, seek out one that has experience working with businesses similar to yours. If they have a track record of picking and choosing plans that align with your industry, it’s more likely that you’ll end up with an insurance policy that’s beneficial to your needs. If you’re not sure where to start, keep in mind that you can:
Use your network.If you have a colleague in your industry, it doesn’t hurt to reach out to them directly to see what insurance providers they use. For example, if you’re a yoga instructor and know that you need to sign up for general liability insurance, other instructors can be excellent resources to get recommendations for solid providers.
- Do your homework.的re is a world of insurance providers out there that cater specifically to small businesses. Even if your work feels like an outlier, you are not alone. Plus, that may mean that you should work with a broker who has experience in your field to help you find your insurance fit.
- Consider specialty insurance or gap policies.Many insurance plans have been created that cater to unique workers or workplaces. There are policies out there that align with rideshare drivers and insurance plans for boats that move between shore and sea. Even if you have a small business that doesn’t fit into a traditional mold, there are applicable products, providers, and brokers out there that are ready to help.
5. Review, customize, and purchase your policy
At this point, you may have the most applicable insurance policy, or even a combination of policies, in front of you. Read through your policy to make sure you fully understand the ins and outs of it. Once you talk through your questions with an insurance provider or broker—even conducting your own independent research from customer reviews—you’re ready to sign and purchase!
6. Review and reassess your policy annually
Once you sign onto your first insurance policy, put a reminder on your calendar to revisit the policy a year later, prior to the end of the term date. At that point, you may have some adjustments to your business that need to be reflected in your policy, like more employees or a new building. You may even have more clients than you did a year before, so your insurance needs to reflect that heightened risk. You have the power to bulk up or pare down your policy each year.
Business Insurance FAQ
What are the three types of business insurance?
- Property Insurance: Covers physical assets such as buildings, inventory, and equipment.
- Liability Insurance: Covers claims related to bodily injury, property damage, and other types of losses.
- Professional Liability Insurance: Covers professional negligence, errors, and omissions.