Choosing the Right Small Business Insurance
Creating and maintaining a comprehensive risk management strategy is buying the right type of insurance and the right amount of insurance protection. Events that are unavoidable and that would cause the business serious financial hardship can, in most cases, be insured against.
Other Small Business Insurance Learning Topics:
Be Strategic | Be Smart | Be Safe | Buy Insurance | Routinely Reassess | Did You Know?
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While there are several different types of insurance, the question to ask is which type is right for your business and how much protection is needed?
The two primary categories for any business are general liability and workers compensation.
General liability insurance helps to protect against claims of bodily injury, as well as physical injury or damage to property. Coverage is often offered through a Business Owner's Policy along with property coverage to provide comprehensive protection in the event of an accident at your workplace or another location where you conduct business. Potential costs that can be addressed through this type of coverage include:
- Bodily Injury
- Loss of Service
- Property Damage
- Medical Expenses
- Libel
- Slander
- Legal Expenses
- Court Costs
- Witness Fees
- Attorney's Fees
- Police Report Costs
- Settlement Bonds
- Court-Awarded Compensation
- Interest
- Lost Business Income
In addition to general coverage, there is also the option to purchase liability coverage for special conditions. Professional liability insurance, also referred to as Errors and Omissions (E&O) Insurance, offers certain protections for businesses that offer a service. This type of insurance protects against service delivery malpractice, errors and negligence. Some states require certain professions to have this type of coverage, such as physicians.
Excess liability insurance, also called Umbrella Insurance, provides an additional level of business asset and future income protection above and beyond general liability, employer's liability, and hired and non-owned auto liability policies. Purchasing this type of insurance offers an affordable approach to securing higher policy coverage.
The second primary business insurance category is Workers compensation insurance. Worker's compensation insurance is required in every state other than Texas, and serves to help to pay for employees medical expenses and missed wages if they are injured while working. The amount of insurance employers must carry, the rate of payment, and type of employee that must be covered varies among each state. Your state Department of Labor offers specific guidelines. Contact information for this agency is available through the BUZGate.org workforce development directory.
Two additional forms of protection to consider are business interruption insurance and key person insurance. Business interruption insurance, as the name suggests, will help to cover losses that result from natural disasters, fires and other insurable catastrophes that may cause your business to shut down for a significant amount of time.
Key person insurance helps the company to maintain operations if a person who is essential to ongoing operations dies or becomes incapacitated through illness. This type of coverage is usually life insurance that names the business as the beneficiary.
How do you know what is necessary for you and your business? The answer lies with a competent insurance broker.
In business, when making decisions about which provider to go with for most any service, we recommend investigating and choosing from at least three different options. While price is routinely a prominent factor, trustworthiness, reliability, reputation and experience with similar client profiles may also be important. insureon offers a convenient online platform for requesting multiple quotes and comparing different insurance coverage rates. You may also use a convenient Business Insurance Checklist to evaluate which type of insurance you may want or need.
Lastly, be vigilant. This means establishing practices to routinely assess business risk by repeating the first three steps:
- Being strategic by continually looking ahead and keeping your risk management plan current
- Being smart by continually maintaining a safety plan, educating and engaging your employees in its implementation
- Buying the right type of insurance and level of coverage to minimize loss.
"...that once you become an insureon customer, you have ongoing access to a team of knowledgeable insurance advisors that provide personalized customer service, just like you'd get from a "bricks-and-mortar" agency? Because they know small business insurance better than the agent down the street, they offer the expertise to ensure that claims are handled expediently, billing is accurate, questions are answered, and insurance coverage keeps up with the demands of your growing business.
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