Running a small business is very important investment that brings profit.
Small Business insurance protects your investment by minimizing financial risks associated with unexpected events such as death of a partner, an injured employee, a lawsuit, or a natural disaster. If you are an employer and you have a business partner, then you need to take business insurance in order to cover your assets.
Your state government determines insurance requirements for businesses. Most states require businesses with employees to pay for workers' compensation insurance, unemployment insurance, and state disability insurance.
Your state may require insurance of specific business activities. For instance, if you own a car or truck and use it for business purposes, you may be required to purchase commercial auto insurance. Your financial lender or investors may also require you to maintain life, business interruption, fire, flood or other types of insurance to protect their investments
The different types of business insurance are as follows:
Small business property insurance
This covers your small business property such as you business equipment, office furniture in case any uncontrollable circumstances happens such as theft or fire.
Workers compensation insurance
Protects your employees if they suffer job-related injuries. The policy pays the medical bills for the employee who is injured on the job. Each state mandates coverage and provides benefits. In most states, private insurance or an employer self-insurance arrangement provides the coverage. Some states mandate short-term disability benefits as well.
General Liability Insurance
General Liability insurance insures against liability legally imposed upon your business because of the negligence of the business or its employees. It also protects your business when the business is sued for negligence. Below are different types of Liability Insurance you can choose from.General liability insurance is the main coverage to protect your business from: injury claims, property damages, and advertising claims. General liability insurance is also known as Commercial General Liability (CGL). Commercial General Liability helps protect your assets by providing a first line of defense against a variety of claims for alleged negligence.
• Product liability insurance: Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as result of a defect product that cause injury or bodily harm. The amount of insurance you should purchase depends on the products you sell or manufacture.
• Professional liability insurance: Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance). This type of liability coverage protects your business against malpractice, errors, negligence in provision of services to your customers. Depending on your profession, you may be required by your state government to carry such a policy.
• Employment practices liability insurance: If an employee decides to sue you for sexual harassment, or wrongful termination, this insurance will cover it.
You can choose to get health insurance for you and your employees. Costs of medical bills and medication are extremely high, so having health insurance in your business can prevent employees as well as yourself from having to worry about how to pay for it.
Business Interruption Insurance
Business interruption insurance insures against loss or damage to the cash flow and profit of a business caused by the business being unable to operate because of interruption. The easiest example is to think about a critical piece of machinery being struck by lightning. The repairs to the machine may be covered by other coverage such as property or casualty insurance. But, if you can’t make widgets for three months, then there is no replacement of that income without this coverage.
Every small business is different and therefore requires specific alterations. Try and Speak to a Small Business Insurance Agent in that case you will figure out which types of coverage will best fit the needs of your small business. Take their recommendations seriously; don’t underestimate the chances of an accident or unexpected event happening to you. Prepare for the worst, but hope for the best. Make sure to shop around. Get quotes from several different companies to discover the best price.
It can be difficult at times to manage your business risk. The points listed below are very important as you cannot just jump into conclusion of purchasing small business insurance cover. Before you purchase insurance, you need to check and consider the following things:
1. Get the knowledge of different types of Coverage availableTake time to develop an understanding of the types of small business insurance available in order to discuss them with your insurance professional. You may not need to know much about the coverage but know what each type of business insurance covers. For instance: property insurance is necessary to protect your business equipment.
2. Analyze Your BusinessAnalyze your business to make an assessment of what coverage you will need now and make some educated guesses at what your business will need in the future. It is best advice to talk other people in your line of business. Prepare a description of your business and questionnaire that you have written out so you can quickly interview different insurance professionals in seeking quotes for coverage.
3. Choose an Insurance Professional Much like an accountant or lawyer, your insurance professional should be someone with whom you plan to develop an ongoing relationship, someone you can trust. Choosing an insurance professional and working with that professional is made easier when you have a clear understanding of your business and its direction as well as a general idea of what types of policies are available.
4. Review Your Initial Business Insurance Plan Regularly At the initial purchase, set a calendared date to review your business insurance plan with your insurance professional regularly. Things change in business. Commit yourself to monitor that change and review the need for more or less coverage on a regular and continuing basis.