The idea of paying for something that will likely never happen, insurance, can feel like throwing money out the window to small business owners. If you don’t have insurance you’re not alone. A recent survey by Manta and Insureon found that fewer than one-third of small business owners have a business owner’s policy, the basic business insurance that covers general liability insurance and commercial property insurance to protect you from loss. In Las Vegas, they would call that “rolling the dice.” If you’re a part of the uninsured one-third, let’s look at what you should do to get on board and protect your business while limiting your liability.
At its most basic level, small business insurance should help protect your company’s property, income and safeguard you against liability claims. There is not just one single type of small business insurance policy, but three essential coverages; business property, general liability and business income insurance. Often time’s insurers will bundle these three together to save you money and have a more comprehensive package. Let’s look at the details of each.
- Business property insurance– Helps protect the physical location that your business owns or leases as well as property such as tools, equipment and In the litigious society we live in today, general liability insurance can protect you from lawsuits if a customer slips and falls in your store, or if you cause damage to a customers’ property, among other things.
- General liability insurance– Helps protect your business from the financial costs of property damage, bodily injury, personal and advertising injury claims made against your business.
- Business income insurance– Helps replace lost income when you are unable to conduct business due to a covered loss like a theft or fire.
With some portion of your business conducted online, you are inundated with advertisements to protect your business against cyber attacks. As such, the insurance industry has adapted and provides options for you to protect yourself. Small businesses are much more vulnerable because they don’t have huge IT teams and massive budgets to protect them. You know that cyber insurance will cover you for data breaches, but it can also protect you against lawsuits by customers, vendors, or others as a result of the attack. If your e-commerce customers’ credit card data is stolen and one of them sues you, you can hopefully rely on this kind of coverage.
Just like you would do when selecting a stockbroker or an annuities salesperson, utilize an independent insurance agent who does not have a vested interest in selling you one of their own products. This was the Progressive Insurance Company model, which has turned out well for them. Also, don’t be afraid to talk to other business persons in your community or field to see what type of coverages they may have. Ask your accountant or lawyer if they can recommend a trusted insurer. Insurance is something that you need to have and hope that you never have to use.