For anyone that has a small business or is thinking of starting one, not having business insurance – or not containing the right coverage, can be extremely risky. Without the proper type of insurance, a natural disaster, theft, employee accident, or lawsuit could tarnish your business and might even consume your personal assets as well.
Being under-insured can be just as detrimental for many small business owners. According to a survey by Marshall & Swift, 75% of businesses in the United States are under-insured, and a New York Times article reports 40% to having no insurance at all.
Most entrepreneurs understand the risks and challenges of running a small business. However, there are effective ways an owner can reduce them, including obtaining proper insurance coverage. There are several vital forms of insurance plans one must consider.
Professional & General Liability
Among the most common incidents small business owners experience, contract disputes and client complaints top the list. A Professional Liability insurance plan can cover claims related to client dissatisfaction, including alleged work mistakes, failure to fulfill contracts, undelivered work, or negligence, and General Liability protects in the case that you, your employees, or your products or services cause or are alleged to have caused bodily injury or property damage to a third party.
Next in line for most reported incidents in 2018 were on-the-job injuries. Of all the different types of business insurance, Workers’ Compensation is mandatory in most U.S. states. Workers’ Compensation insurance covers medical bills and partial lost wages when employees are injured on the job.
The cost of workers’ compensation benefits are usually calculated on the degree of injuries and illnesses that are common within the occupation. Not to mention, this form of insurance automatically protects both business and employees from lawsuits regarding negligence if injured on the job.
Commercial Property Insurance
If you own your building or have business property such as office equipment, computers, inventory, or tools, you should consider purchasing a Commercial Property insurance policy that will protect you in case of fire, vandalism, theft, smoke damage, and weather-related disasters. It can also help to pay for the replacement of stolen business property.
Just one major damage claim by a customer, weather disaster, or an employee accident could feasibly zero out all the hard work, sweat, and passion that you have poured into building your business. Obtaining the right insurance policies can protect that from happening.