Types of Small Business Insurance – Coverage You Should Know
Did you know there are more than a dozen different types of small business insurance options? A small business lawyer in Phoenix can sort through all of your options, from errors and omissions insurance to directors and officers liability insurance and more. They will help you find the right business insurance coverage for your small enterprise and explain how a business owner’s policy can benefit you.
Why You Need Insurance as a Small Business Owner
Failing to insure your business can have dire consequences if the unimaginable happens. For example, if a natural disaster strikes and causes immense property damage that forces you to pause your operations, you and your employees will have no income for a period of time.
Say an employee injures themselves on the job and decides to sue you for the incident as well as cover their lost wages. Workers’ compensation insurance helps you save money while also supporting your injured employee.
Small businesses receive financial and legal protection when they carry general liability coverage, workers’ compensation, and other business insurance needs.
Insurance Coverage That Benefits Small Businesses
Many insurance providers offer a business owners policy that covers a wide range of plans. Below are some common types of small business insurance plans that are subject to a commercial umbrella insurance policy.
Professional Liability Insurance vs. General Liability Insurance
Carrying business liability insurance means that your provider will cover your legal costs if a customer sues your company for harm. Professional liability insurance involves any errors made during service, whereas general liability insurance focuses on claims of bodily injury, such as a customer falling and breaking a bone outside your store.
You may enroll in a business owners policy that includes:
- Employment practices liability insurance
- General liability insurance
- Product liability insurance
Depending on your profession, you might need to carry malpractice insurance. This is more specific than a general liability insurance policy as it often pertains to professionals like doctors or lawyers.
Business Income Insurance
Also known as business interruption insurance, this policy will recoup your lost income if severe property damage forces you to shut down operations temporarily. Small businesses can cash in on this coverage in the event of fires, floods, theft, and more.
While you might think that other types of small business insurance plans are a better investment than business interruption insurance and may not think that there is much of a possibility of an emergency stopping your work operations, it’s better to be safe than sorry and not having to deal with weeks or even months of lost income.
Commercial Property Insurance
Many small business owners take pride in their company by investing in a commercial property insurance policy. Your business property insurance provider can reimburse you if any company-owned items or personal property, such as computers, office furniture, or outdoor signage, are stolen or damaged.
Commercial Auto Insurance
Think about all of the small businesses in the U.S. that bring their goods and professional services to the public with company cars and commercial vehicles. Business auto insurance coverages will give peace of mind to any limited liability company using a company-owned vehicle to deliver goods or services, including:
- Take-out restaurants
- Flower shops
- Home service contractors like plumbers and electricians
- Utility companies
Holding a commercial auto insurance policy protects you and the driver of the car if they were to get into an accident on the job. Insurance pays for legal defense costs if someone hurt in the accident sues your company. It will also cover medical expenses for the driver and any victim reporting a bodily injury.
Small Business Insurance Policies That Benefit Employees and Customers
Several types of small business insurance policies benefit only the business owner and select employees reeling from an accident or emergency. The following business insurance plans benefit the business owner as well as their employees and customers.
Health Insurance
Although not required, some small businesses elect to offer their employees enrollment in a group health insurance policy. The business owner enrolls in a group plan and allows eligible employees to sign up for healthcare coverage. Enrolled workers may receive coverage at a lower cost than if they were to enroll in an individual plan.
The cost of the plan will come out of a worker’s paycheck and go to the insurance provider. One of the biggest benefits of carrying this insurance is that it’s a valuable perk to advertise when searching for talented employees.
Workers’ Compensation Insurance
A business insurance that the majority of entrepreneurs must carry is workers comp insurance. Several states mandate this type of coverage regardless of the number of employees you have working for you. The primary purpose of workers’ compensation coverage is to recoup some of the lost income that someone misses out on due to a work-related injury or illness.
Coverage will also pay for medical bills and expenses stemming from the injury, such as physical therapy or home assistance. Your small business will receive legal protection as well since this policy allocates funds to legal fees if a worker decides to sue the company for negligence.
Cyber Liability Insurance
Also known as data breach insurance, this policy protects all parties following a data breach or cyberattack. Not having cyber liability insurance risks your customers’ privacy and security and may cause them to take their business elsewhere. Your policy coverage should allocate costs toward the following:
- Notifying those impacted by a data breach
- Offering credit-monitoring services
- Launching a crisis management campaign to protect your company’s reputation
Of all types of business insurance, this one remains increasingly relevant in today’s digital age.
Meet With Experienced Business Lawyers Near You
If you’re considering starting a business, speak with a qualified attorney who can review essential components for success, including which types of small business insurance you need. The team at Anthony Law Group can guide you through the ins and outs of launching a business and set you on the right path by taking care of common legal issues impacting business owners. Call us at (602) 362-2396 to request a consultation.