Starting and running a business, no matter how small, is never easy. In fact, even small businesses involve making hard decisions about matters that may not always be familiar to you. One of the critical areas for consideration and something that a business owner should never overlook is the insurance. What insurance does a small business need?
What Insurance Does a Small Business Need?
Understanding what business insurance your small business needs and getting the right one from a reputable insurance company is crucial for protecting your investment and ensuring long-term success.
General Liability Insurance
This type of insurance protects your business against claims of bodily injury or property damage. So if your business requires regular interaction with clients and customers regularly, like a small cafe or a mom and pop store, this type of insurance is something you might consider getting.
It is also wise to include product liability insurance when getting general liability insurance. This can protect your business from claims of bodily injury or property damage due to the use of your product.
Commercial Property Insurance
This covers the building and equipment that you use to operate your business. This type of insurance protects your business from losses due to theft, and man-made or natural disasters.
Professional Liability Insurance
This type of insurance, also known as errors and omissions insurance, protects service-based businesses from claims of errors or negligence on their part. For instance, if you are a consulting firm and your client suffers financial losses due the advice and recommendations provided by your firm and decides to sue your firm, your insurance can cover or help cover the cost of the lawsuit.
Business Income Coverage
Also known as business interruption insurance, it can cover income loss or help you cover ongoing expenses when you’re forced to close temporarily due to a covered unforeseen event like theft or flood.
Commercial Auto Insurance
This type of insurance provides coverage for property damage or bodily injury if you or an employee caused an accident while driving a company-owned car, truck, or van for business purposes.
Workers Compensation Allowance
Typically required by law in most states, this type of insurance is something you need if you have employees. It provides benefits to employees who are injured or become ill while doing work-related duties or because of these duties. It can cover medical expenses, lost wages, rehabilitation costs. It aims to protect you and your employees from financial strains should this type of unfortunate event arise.
Commercial Umbrella Insurance
This type of insurance can extend the limits of your existing liability policies. It acts as your safety net, providing you with additional coverage in case you are presented with another unforeseen event and your other liability policies have reached their limits.
Cyber Liability Insurance
In the digital age, cyber-attacks have become a concern for businesses, especially for those relying heavily on data and who need to collect and keep client information. Data breaches are costly and can even cost you your reputation. Cyber liability insurance helps protect your business from the costly effects of these breaches.
Employment Practices Liability Insurance
This type of insurance is designed to protect businesses from the cost of lawsuits arising from claims related to employment issues like sexual harassment, discrimination, and wrongful termination.
Business Owner’s Policy
Among the types of business insurance, among the most popular is the business owner’s policy because it is a combination of general liability insurance, commercial property insurance and business income insurance.
What Type of Insurance Do You Need?
The nature and location of your business operations will usually dictate the type of insurance you need. You will not need everything on this list but you will probably need more than just one. For a more informed decision, talk to a business insurance agent. They will be able to help you decide which type of business insurance is best for your business.
Los Angeles insurance sellers are particularly mindful of the unique needs of the businesses in their area and are able to offer comprehensive insurance policies customized to meet the distinct challenges of businesses operating in this area.