Tips for Insuring Your Small Business

[Bailey Harris]

If you are a small business owner, insurance is something you simply can't do without. Depending on what kind of business you operate, there may be several things your policy should cover so your business is never in jeopardy due to an accident or other major catastrophe. Here are some of the types of business insurance you may want to consider based on the needs of your business, as well as some tips to make sure you understand what you need and what your policy covers.

Commercial Property Insurance

If you have property in which you operate your business from, you most definitely need commercial property insurance. This type of policy will cover any damage or rebuilding costs if disaster were to strike. Your building and property would be covered against things like fire and smoke damage, storm damage including strong winds and hail, and even destruction caused by others such as vandalism. Depending on the policy, you may need additional property coverage if you own valuable tools and equipment that are required to operate your business. If the tools you need to do your job are damaged or stolen and they aren't covered under your insurance policy, you would possibly have to shut down for a period of time. Some property insurance policies include something called business interruption coverage. This is beneficial if your property and equipment were damaged to the extent that you would need to temporarily relocate your business due to a catastrophe. It would cover expenses required to move your business and keep it running while repairs were made to your commercial business property. Not all policies include this, though-- read your policy carefully and ask your insurance agent for additional information if you need it. It's important to make sure all of your bases are covered.

Liability Insurance

Nearly every business requires liability insurance. Even if customers don't need to set foot on your property, if you hand out recommendations or advice-- you need to be protected. Liability insurance covers accidents, injuries, and other situations caused by negligence. If an injury were to occur on your business property or elsewhere because of your advice, the damages could be substantial. Your liability policy would cover the cost of legal representation, as well as legal fees and actual damages.

Workers Compensation

Workers compensation is a necessity if you have employees that work for you. If an employee were to be injured on the job, this type of insurance would cover all medical claim expenses, legal representation and fees, and lost wages.

Business Auto Liability

Regular automobile insurance is not enough if you have a company car. To be fully protected, you need business auto liability coverage. If you or one of your employees were to be involved in a car accident, personal auto insurance may not be enough to cover the damages. Business auto liability policies are more expensive than personal auto policies, but essential to have if your business requires use of an automobile.

Product Liability Insurance

If your business makes or sells any products, wholesale or retail, product liability insurance will cover any injuries that your products could potentially cause. Even if your products have been extensively tested and proven safe, you could have a lawsuit on your hands if a customer were to have an allergic reaction, for example, to something you sold them.

Professional Liability Insurance

Some professions require professional liability insurance. If you offer any type of services to the public, this type of policy would cover you against any malpractice due to error or negligence. Examples of professions that need this type of insurance are doctors and hair-stylists. Injuries or accidents caused by malpractice could be very costly-- you simply can't afford to be without this insurance if you provide services to customers.

Understand Your Policy

It's very important that you know your business insurance coverage inside and out. Read the fine print carefully, and know what your exclusions are, if any. Ask your insurance provider for any clarification if you need it.

Do an Appraisal

To make sure you have the appropriate amount of coverage for your small business, it's wise to have an appraisal done to determine the actual value of your property. The value of your business can vary from year to year, and you could either be paying too high of a premium for your policy, or be lacking the coverage you need to protect you and your business.

Getting the coverage your business needs may seem like a complicated endeavor. Fortunately, the process can be made simple by doing a little bit of research and working with your insurance agent or provider to make sure your business has the protection it needs to operate efficiently and successfully.