Even if your small business is in a low-risk industry — for example, you are not running a mining operation or manufacturing fireworks — you still are at risk for mishaps that could result in a lawsuit or loss of income. A delivery person might trip on your walkway and break a leg; your computer equipment can get stolen; a product you create could inadvertently cause injury to a customer; your office could burn to the ground or get swept away by flood.
Unlikely? Maybe. But why take that chance and put your livelihood at risk? It’s time to look into small business insurance. But first you need to examine the types of small business insurance available to see what’s a good fit for your company.
Business property insurance
If you own a business property, you will need property insurance. Make sure that the insurance you buy will protect you from a wide range of losses including damage to the building — and all the contents of the building such as desks, chairs and computer equipment — due to fire, earthquake and flood. A good business property insurance policy will cover this and more, including loss of income if your business has to temporarily shut down because of damage. If you lease the building, your landlord should provide this coverage, but check with the owner about exactly what is covered before the unthinkable happens.
At the very least, you need to consider what is called a comprehensive general liability policy, or CGL, that will cover accidents or mishaps to third parties, including personal injuries (such as someone tripping or slipping and falling in your office space). If you lease your office space, liability insurance is important because it will cover any fire or smoke damage caused to the property because of something gone wrong in your office space (such as a trash fire). You may also want to consider other kinds of coverage that can be sold under liability insurance including professional liability, malpractice, and errors and omissions, depending on the nature of your business.
Other types of small business insurance
Depending on your type of business you should consider buying other types of insurance as well including:
- Workers’ compensation insurance (if you have employees).
- Automobile insurance for company vehicles.
- Health insurance for you and employees.
- Life insurance.
For extra small business insurance protection, consider getting “excess liability coverage,” also called commercial umbrella insurance, which tailors an insurance package that fits your needs.