You’ve worked hard to create a small business to be proud of, and it deserves all the protection it can get. However, when you’re first starting out insurance may be an area of confusion. Beyond the business insurance policies you must have, there are also ones that are strongly recommended. By putting these coverages together, you can start to build a safety net to help protect your livelihood.
There are many different business insurance products available to small businesses. Here are four types of policies that small business owners commonly consider.
1. Workers’ Compensation
Workers’ Compensation insurance protects you against medical expenses and lawsuits that can arise from employee workplace injuries and illnesses. It could also pay lost wages as a result of the work injuries that an employee sustains.
In most states, Workers’ Compensation insurance is required by law if you have employees. Sole proprietors are generally exempt from meeting these legal requirements. However, having this type of business insurance in place may still be a good idea even if it is not mandatory.
Work-related injuries can potentially be expensive. Health insurance policies typically exclude them from their coverage, leaving you out of pocket for medical costs if you do not have Workers’ Compensation insurance. This could have a huge impact on your business (and possibly personal) finances if you are operating within razor-thin budgets and profit margins.
A Workers’ Compensation policy can also provide other important benefits, such as paying a portion of your wages while you take time off to recover or providing disability support if you are unable to return to work.
2. Professional Liability
A Professional Liability insurance policy (also known as Errors and Omissions or E&O insurance) is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing.
Many states and professional associations require Professional Liability insurance for certain occupations. You may be required to carry a policy to get or renew some professional licenses. However, you may still want to consider this type of business insurance in some circumstances.
Businesses that provide professional advice or services may benefit from having Professional Liability insurance. A policy helps protect you against claims of error, omissions, misrepresentation, negligence, and other related events.
A Professional Liability policy also helps protect you against baseless claims. These can be expensive to address, especially if a lawsuit is filed. Your policy will cover the cost of hiring an attorney and other legal fees resulting from efforts to clear your name or business reputation.
3. General Liability
Your General Liability policy can protect you against any claim by an outside party regarding injury or damage to their property. In these instances, your policy will cover your legal expenses as well as your cost to replace or remedy the situation.
This type of business insurance is typically not required by law, but it may be necessary if you work with business contracts. Businesses often ask freelancers and contractors to provide proof of their General Liability insurance before signing a contract with them. Commercial landlords may also require tenants to carry General Liability insurance to rent their premises.
Even if you are not required to have General Liability insurance, a policy may still be useful. Third-party injury claims are more likely if clients, customers, vendors, or other members of the public regularly visit your workplace.
A General Liability insurance policy also protects you from property damage claims from third parties. This may be relevant to your business if you regularly visit customers in their homes or are responsible for the care and storage of their property.
4. Business Owner’s Policy
A Business Owner’s Policy (BOP) is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service.
This type of insurance policy is typically not legally required for you to operate (though it may include coverage, such as General Liability, that you may need to meet some contractual obligations).
While it may not be required by law, a BOP could help protect your small business from many common risks. These policies can be customized to suit your business’ needs, covering events such as property damage, hired vehicles, transporting clients’ property, and business interruption.
Find business insurance with BizInsure
Workers’ Compensation, Professional Liability, General Liability, and a Business Owner’s Policy are four types of business insurance that small businesses should consider. BizInsure makes it easy to get quotes from multiple insurers and compare all four—with just a single data entry.
No matter what industry you work in, business insurance could help put your small business on the path to success. Start quoting business insurance policies.