Business Insurance for Small Business - Relaxed Mode
Small business insurance for LLC
Small business insurance for LLC

Business Insurance for Small Business

The article will help you find the right business insurance for your small business. Business insurance provides financial protection when an accident involving the business owner, employees, customers, or property. It also covers both the business and its owner.

The article will help you find the right business insurance for your small business. Business insurance provides financial protection when an accident involving the business owner, employees, customers, or property. It also covers both the business and its owner.

Note, however, that no single business insurance policy covers all risks faced by small businesses. Particular business insurance addresses a particular accident, lawsuit, and damage that could impact a business. And the specific risks covered by a policy depend on the types of coverage the business owner purchase.

Below are some of the policies that address common risks:

General Liability Insurance

General Liability Business Insurance for small business protects businesses from risks such as customer injury, customer property damage, and advertising injury.

It covers the high cost of lawsuits and helps small business owners qualify for leases and contracts. It is needed by small businesses that rent or own an office or commercial space.

Moreover, small businesses that work directly with clients and customers usually benefit from commercial general liability insurance.

Commercial general insurance helps to keep small businesses financially stable when they are sued by a customer or competitor. Because it provides such important coverage, most small business owners buy the policy right after starting their business.

General liability insurance covers small businesses for common liability claims from third parties (that is people outside of the business).

Commercial general liability insurance provides coverage for legal defense costs when a third party sues over a bodily injury, property damage, or advertising injury.

The policy can pay for everything from hiring a lawyer to court-ordered judgments and settlements. General liability insurance costs an average of $42 per month. This is based on the median cost of policies.

Business Owner’s Policy

Business Owners Policy (BOP) is a combination of general liability insurance (GLI) and commercial property insurance (CPI).

The advantage of this business insurance is that it typically costs lesser than when the two policies are bought separately. Small businesses that own or rent a workspace will need a business owner’s policy.

Also, it is a wise choice for small businesses that work directly with the public and own property. Business Owners’ Policy provides coverage for financial losses from customer accidents and incidents like fires and burglaries.

Business Owners’ Policy is especially for low-risk small businesses. A small business that qualifies saves money and gains coverage for the most common claims.

Because a business owner’s policy includes both general liability insurance and commercial property insurance, it is also called business hazard insurance. This combined policy provides liability and property coverage for your small business, and costs on average, $57 per month.

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Professional Liability Insurance

Professional liability business insurance for small business is also called errors and omissions insurance. It protects small businesses against the costs of client lawsuits over unsatisfactory work. Professional liability insurance is meant for businesses that make a living off their expertise (that is service providers).

There is no professional service provider that does not make mistakes, even the most experienced and thorough. Unfortunately, not all clients show understanding especially when errors or omissions cost them considerable time or revenue.

Professional liability insurance helps protect small businesses from unsatisfied clients or customers. On average, professional liability insurance policies cost $59 per month.

Workers’ Compensation Insurance

Workers’ compensation insurance provides coverage for medical costs and lost wages for work-related injuries and illnesses. This policy is usually required by virtually all governments for businesses that have employees.

So workers’ compensation insurance is not optional for small businesses. Normally, a workers’ compensation policy is needed as soon as a small business hires its first employee.

Workers’ Compensation Insurance provides important protection against medical expenses and employee lawsuits related to workplace injuries.

For example, if a business owner or an employee needs medical care or time off due to a workplace injury.  Also, an injured employee may sue a small business for its failure in preventing an accident.

Small businesses that do not have workers’ compensation insurance will be responsible for any medical bills and legal fees. Most governments levy businesses costly penalties for noncompliance. Workers’ compensation insurance costs an average of $47 per month.

Cyber Liability Insurance

Cyber liability insurance is designed to protect small businesses from the high costs of a data breach or software attack. This business insurance for small business provides coverage for expenses such as customer notification, credit monitoring, legal fees, and fines. Cyber attacks and data breaches have become increasingly common and very expensive.

Because small businesses often have weak cyber security, they are an attractive target to cyber attackers. With cyber insurance, small businesses can recover from financial losses caused by cyber-attacks and data breaches.

It is a key policy for businesses that handle credit card numbers, work in the cloud, or operate in cyber security. Cyber liability insurance is an affordable option for a small business in the face of growing global cyber security concerns.

Auto Insurance

Vehicles owned by small businesses are required by law to have commercial auto insurance. And, personal vehicles used for business purposes are not covered by a personal auto insurance policy. In such cases, hired and non-owned auto insurance is needed to cover the liability of small businesses.

Commercial auto insurance provides coverage for medical payments and property damage related to an accident. It includes legal expenses if a small business was sued as a result of such events.

An auto insurance policy may also provide coverage for vehicle theft, vandalism, and other losses and damages. Also, most commercial auto policies include liability insurance to cover legal costs if an employee gets into an accident.

Small businesses that regularly use vehicles that do not belong to them will need hired and non-owned auto insurance (HNOA). This policy provides coverage for vehicles that belong to business owners or an employee. It also covers vehicles that a small business rents or leases.

Small businesses need this coverage even when they do not realize that they need it. Many a time, small business owners ask employees to use their vehicles for work-related errands. This may seem not to matter until it leads to auto liability issues.

Special Business Insurance Policies

Apart from the policies considered so far, businesses with expensive equipment, a board of directors or extra liability concerns may need additional coverage or endorsements covering exclusions.

Also, insurance coverage for communicable disease, though available, is not part of standard policies. And most insurers will not write new policies covering COVID-19.

The following are examples of specialized coverage for unique risks:

  • Commercial Umbrella Insurance
  • Commercial Property Insurance
  • Business Interruption Insurance
  • Inland Marine Insurance
  • Product Liability Insurance
  • Employment Practices Liability Insurance
  • Directors and Officers Insurance
  • Special Events Insurance

Business Insurance for Small Business – Conclusion

As a small business owner the importance of insuring you business from onset cannot be overemphasized. The is why we complied this detailed post for small business owners. There are cheap small business insurance that you may start with until your business grow.

Israel Chima

Israel Chima is a pro blogger that derives joy in helping small and medium businesses gain an online presence.

He guides business owners in having a full online presence by creating world-class websites, social media marketing, and content marketing.

Well-written SEO content ranks easily on the first page of Google, which translates to getting real customers.

Israel chima is an authority in planning and developing well-structured SEO content. So, you can contact him for your blog content.

He is the author of 3 books on entrepreneurship, education, and transportation business. You can check out his book on Amazon titled “Discover to Recover.”

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