Getting the right kind of business insurance is important. It can help you to safeguard against a drop in sales, natural disasters and even unforeseen crises. Small Business Trends contacted Keith Moore of CyberPolicy to find out the types of business insurance your operation needs. Having the right type of insurance coverage is just as important as the goods and services you sell. He told us what’s important to get.
Choosing the right type of insurance requires knowing exactly what you need.
Types of Business Insurance your Operation Needs
Below is a list of the different types of insurances for a business you’ll need. It’s a good starting point when you’re looking to find the right policy to insure your business. Having an expert on your side is a good way to decide which of these policies is best for your particular business.
Depending on the industry you work in, you might need more of one kind of coverage than another.
First of all, Moore explains what a startup needs.
“Startups definitely need business insurance. Depending on your business, you may need a myriad of insurance policies. A BOP policy is a great starting point because it includes the coverage of General Liability (bodily injury and property damage) and Business Property.
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He says a startup will also need Workers Compensation and other forms of insurance.
Types of Business Insurance
Getting the right insurance protects your enterprise from any kind of business interruption. Moore started talking about different types of insurance for businesses. He said there was insurance for business to cover everything from employees to the property the company is on.
These cover everything from property damage to certain other situations. It’s important to consider your options here if you live in a flood zone or an area prone to fires. Some of these types of natural disasters can hamper your ability to make money.
Commercial property insurance is important for a business. It doesn’t matter whether you’re looking to insure business property that is in your home or an office building. This type of insurance for business protects things like office furniture and equipment inside. Look for a policy that protects things outside like the signs on your property.
Property insurance is one of the cornerstones any business needs. It’s a necessary coverage.
Business Owners Policy (BOP)
This type of policy can be paired with general liability and business property insurance. It’s good for business owners who rent a space and have equipment in it.
“It’s also good for business owners with employees that could act dishonestly or steal clients’ property, or have business equipment such as computers, printers and furniture,” Moore says.
“General liability helps cover medical expenses and legal fees resulting from bodily injuries and other issues for which your business may be legally responsible,” Moore says.
It can also protect employees with a personal injury clause that covers property damage. This type of policy can also cover defamation and slander. It’s a coverage you’ll need to have and a type of insurance your business can’t do without.
Liability insurance is important for any business. Covering your legal costs is an important part of staying afloat. This is the type of policy that takes a lot of the worry off your chest as a business owner.
Professional Liability / Errors and Omissions
Your business needs to have liability insurance. Business owners need to cover all of the bases. This type of policy is also known as errors and omissions policy. As far as insurances for business goes, this is another must-have.
Moore explains what this professional liability insurance does for a small business.
“This type of insurance also known as Errors & Omissions insurance(E&O) protects a business against claims of negligence, failed services, or incomplete services. ”
It’s an important part of your business insurance toolkit. Covering all the angles if you live in a place prone to natural disasters is important.
A business also needs to look at getting Workers’ compensation insurance. It’s important business owners make sure they are covered with this policy. This coverage is often state-mandated.
“Accidents do happen, so your employees will receive financial coverage for missed wages and medical expenses for any unfortunate mishaps that occur at work,” Moore says. He also mentions that business owners can look at it as a type of liability insurance.
“In some cases, it can protect your company from lawsuits for workplace conditions that are alleged to cause harm.”
This is especially important coverage if you’re a contractor. Many of your clients will want to be sure you covered this angle. Homeowners don’t want to be worried about the liability involved if you don’t have this coverage.
“Cyber insurance protects your business from malware, cyber attacks and data loss – very real threats to every business. If your business does anything online, then you need cyber insurance,” Moore says. There are a few types involved here. Make sure any policy you are looking for covers processing credit cards and accepting digital payments as well as storing confidential information.
There are different types of business insurance under this banner. Look for a policy that covers financial data too. Keep in mind cybercriminals are always inventing new ways to steal your data. There can be legal consequences if you are not covered with this type of insurance for a business and data or personal information is stolen.
This is important when you want to look after employees. This insurance is a great incentive in a tight labor market. A policy that offers supplemental coverage can help you attract employees.
Having a benefits package that includes this type of insurance will help you stay ahead of the competition. It’s a good bonus to have in today’s highly competitive markets.
A flexible business needs to be ready with an interruption insurance policy. This coverage can look after a commercial property or even supply coverage for a home-based business.
“This insurance helps replace any income lost if you cannot open your business for a period of time,” Moore says. Unfortunately, this business insurance doesn’t cover viruses or quarantines and travel bans. That’s an important consideration for interruption insurance.
Directors and Officers
There are other business insurances designed for management. Moore says this insurance is designed for a company’s directors, officers and board members.
Moore says there are some specific examples where this policy is important.
“This policy is needed if you have a board of directors, wish to attract and retain senior leadership and have non-profit status.”
“This adds an additional layer of protection to your existing liability coverage, protecting your business from things that might not be covered under your standard policy such as legal fees, medical bills and damage expenses.”
Regardless of the type of business you’re in, this insurance adds an extra layer of protection. You want to look at coverage from every possible angle.
Life Insurance / Key Person
This is important if an important employee or business owner is unable to work or has become disabled. It’s about business continuity and pays out to a key person.
Health insurance is important for attracting employees. However, it doesn’t do anything to protect the business.
It’s important to consider property insurance and other types that might be specific to your industry.
“Commercial Auto insurance protects your vehicles and employees on the road and covers any mishaps involving vehicles driven by you or your employees during the course of business,” Moore says, “This insurance is great for anyone that uses a vehicle for business purposes.
He mentions real estate professionals, contractors, delivery drivers and rideshare drivers.
Do I Need Insurance for a Startup?
Yes, even startups need insurance. Read Expert Insurance Tips When Starting a Business and Benefits of Business Insurance.
How Much Does Small Business Insurance Cost?
“For small business insurance pricing, it’s really a wide range as small businesses can all have different levels of risk; however, small business insurance policies can cost as little as $250/year.”
That can even include liability insurance. The idea here is to shop around to get several different quotes. Don’t go with the first company that offers you some numbers for any of these policies.
How Do You Get Business Insurance?
You get business insurance through an insurance agent, an online insurance marketplace, or the insurance company’s website. Certain types of insurance such as workers’ compensation and unemployment insurance coverage for workers are governed by state law and may be part of a state arrangement depending on the state.
Moore stresses getting the right policy is easy.
“Getting business insurance is simple. Being that it’s 2020, comparison shopping for your business insurance is a smart way to find the policy that best fits your business’s unique needs and budget. You can always speak to a licensed insurance advisor for additional questions before making your purchase. Once you purchase your policy, your insurance will be active within 24 hours.”
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