Insurance comes as a contract for providing risk-free livelihood of a person or a group of people in an organization. As one of the significant types of insurance, small business insurance ensures coverage of multiple assets in a small-scale company. Anyone running a small business can opt for this insurance to get multiple facilities for everyone associated with the business, be it the owner or the employees. Here are the common types of insurances suitable for small businesses.
Which Items Should be Covered?
It is essential to choose a reputed insurance firm while opting for insurance for small businesses. Protecting the personal property and income of a small business should be the purpose of this insurance. By choosing the right insurance plan for small businesses, one can claim coverage from:
Accidents
Natural disasters
Professional errors
Workers compensation claims
The best insurance plans provide multiple coverages rather than single coverage. Some reputed business insurance firms in the US provide all the above coverage or most of them within a single plan. These plans perfectly combine the different aspects of small business risk factors and aim at protecting the small business from all of them.
Types of Insurance for Small Business:
- General Liability Insurance: Bodily injury and property damage of a company may cost the owners expensive repair. General liability insurance helps to protect a business from such expenses. One can either choose a separate general liability policy or a full-scale business owner’s policy to ensure this type of protection.
Many small business owners do not have resources when it comes to covering costly damages during their normal business operations. Therefore, choosing general liability insurance can be beneficial for those business owners. Here are some claims that general liability insurance can cover.
Third-party bodily injury
Third-party property damage
Reputational harm
Advertising injury
- Common Types of General Liability Insurance:
- Commercial Umbrella Insurance: This one can provide added benefits along with the existing liability policies to pay the company owners expensive claims.
- Employment Practices Liability Insurance: When an employee charges the company owner for harassment, discrimination, or wrongful termination, this insurance helps to cover the owner’s legal expenses.
- Management Liability Insurance: Protecting a business’s directors and officers from costly claims is the purpose of choosing this type of small business insurance.
- Commercial Auto Insurance: If a business owner or the employees are driving a car for business and meets an accident, this insurance helps to protect them.
- Business Property Insurance: Whether owning a company property or leasing it, the owners can opt for business property insurance. With this insurance, they can protect the physical location of the business. Besides paying repair or replacement costs, the insurance also protects the tools, equipment, and inventory of a business. Here are the items covered by this type of insurance:
Buildin
Equipment
Tools
Inventory
Furniture
Personal property
Fire damages, lightning, flood, storm, robbery, and theft are some common factors that can damage a company’s assets. Business property insurance can ensure that the owner gets full or partial coverage for the damage.
- Business Income Insurance: The company income may also get affected by natural disasters or theft. Business income insurance helps small business owners to get back the lost income resulting from fire damage, theft, and wind damage.
While a business property is under repair or replacement using business property insurance, the owners can continue to pay expenses, such as payroll and monthly bills with the help of business income insurance. A business owner can choose from a variety of optional coverage to increase the coverage and meet specific risks. Business income Insurance is more common among software companies, service businesses, and retail stores.
Conclusion:
For small business owners, finding the most suitable small business insurance can be difficult. There are multiple aspects of the policies that one should understand clearly. If the requirement is very specific, choosing a simple plan can be beneficial. If a business needs more than one coverage, selecting a combined plan can be the best decision. The cost of insurance for small businesses may vary depending upon the coverage. For general liability insurance, the cost may vary between $400-$600. Before signing the contract with an insurance company, a small business owner should read and understand every detail of the contract very carefully.