7 Types Of Small Business Insurance To Consider

Starting a new business is an exciting moment, and you’ll want to make sure you get the right small business insurance plans to protect your firm from the costs of claims, losses, and litigation. Here’s a rundown of the most critical insurance coverage for small businesses.

 

1. Business Liability Insurance

A small business’s general liability insurance protects it from claims of property damage and personal injury. If a person’s property is harmed while visiting your business, company, or store, you could be held legally accountable. In addition, if your company is responsible for someone’s injuries (other than an employee’s), general liability insurance will cover their medical bills and lost income. 

Reputational loss, advertising injury, and copyright infringement are some of the other claims covered by general liability insurance. Your small business will be able to preserve financial stability with the help of a business liability insurance coverage if you are sued by a customer or another company. Your legal expenditures, as well as settlements and judgments, are covered under a general liability policy.

 

2. Commercial Property Insurance

A commercial property insurance policy covers your small business’s physical location as well as its equipment, computers, and office furnishings. This policy covers both owned and rented company equipment. A commercial property insurance coverage covers a lot of what it takes to keep a small business running. Everything is covered, including tools, inventory, supplies, valuable papers, and business records. 

Outdoor fittings such as signs and fences are also covered by commercial property insurance. A commercial property insurance policy covers any damage to your small business’s property caused by risks like lightning, wind, hail, and fire. Theft and vandalism are often covered by commercial property insurance.

 

3. Business Interruption Insurance

A business interruption insurance coverage covers lost income from a small firm if it is forced to shut down temporarily due to a covered loss, such as a lightning strike or a fire. Theft, wind, and falling items are among the other risks covered by business interruption insurance. 

If any of these issues occur in your small business, business interruption insurance reimburses you for money lost due to damaged merchandise, lost revenue, and other expenses such as temporarily relocating the operation. This is also known as commercial income insurance.

 

4. A Business Owners Policy

A business owners policy (BOP) combines general liability, commercial property, and business interruption coverage into one policy. It’s a cost-effective solution to insure a small business. Separately purchasing the policies will result in higher costs. How much does a BOP cost? According to Insureon, it costs an average of $53 per month. According to the Insurance Information Institute, businesses with less than 100 employees and annual revenues of less than $5 million are suitable candidates for a BOP.

 

5. Commercial Auto Insurance

Commercial auto insurance is required for your small business’s automobiles, trucks, and vans. Any business usage of a car is usually excluded from a personal auto insurance coverage. That’s why, if you have a company car, truck, or van that you use for business, you should purchase a commercial auto insurance coverage. Any claims you make for work vehicles may be denied if you do not have business auto insurance. 

You’d be responsible for any accidents or other damage on your own, which might be very costly. According to Insureon, the average monthly cost of commercial auto insurance is $142. Employees who rent or use their personal cars for work are covered by hired and non-owned auto liability insurance.

6. Cyber Liability Insurance

A cyber liability insurance coverage can help cover the costs of data breaches and cyberattacks. Let’s imagine your company’s database contains some sensitive client information. Cyber liability insurance will cover the costs if a consumer brings a claim against your organization. 

Cyber liability insurance will also cover costs such as alerting consumers who have been affected by a data breach and providing free credit monitoring. According to Insureon, the average cost of cyber liability insurance for small firms is $140 per month.

 

7. Workers Compensation Insurance

If your small business has even one employee, you’ll need to purchase workers compensation insurance. Workers’ compensation covers your employees’ illnesses and injuries at work, and it’s required in most states. Employees are covered by this insurance for medical care, lost income, and disability benefits. According to Insureon, small company clients pay a median monthly premium of $47 for workers compensation insurance.

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