Business insurance

What insurance do you need for a small business? • Benzinga

You did it – you made your dream come true and finally opened your own small business. While you’re probably anxious to get down to business, it’s important to remember that you need to make sure you have all of the proper insurance coverage before you officially open your business. Neglecting to reassess your insurance coverage can put you at risk for a major repair bill or legal fees if a customer decides to take legal action.

What types of insurance do you need?

The types of insurance you want to purchase as a small business owner will vary depending on how you run your business, the types of services you provide, and the number of employees you have. Let’s take a look at some of the most common types of coverage you might consider adding to your business’s list of protections.

General liability insurance

As the name suggests, general liability insurance offers you protection against a wide range of lawsuits that can be brought against you by clients, clients or other business owners. Most liability insurance policies include coverage for the following areas.

  • Medical fees: If a client or client is injured on your property and sues you for the cost of their medical bills, your liability insurance will help cover court judgments as well as the costs of your legal defense.
  • Property damage: If you or an employee damages any part of a customer’s personal property (for example, by dropping a laptop and breaking it) and you take legal action for the cost of a replacement, your liability insurance will help you cover legal costs.
  • Advertising injuries: If a competing business owner sues you for something like slander or copyright infringement, your liability insurance will help cover your legal costs.

General liability protection will not help you fund a lawsuit you bring against another business owner, client, or client. This will only be used to pay the cost of your defense.

Commercial Property Insurance

Commercial property insurance is similar to home insurance in that it protects you against damage to commercial space that you rent or own. In addition to the physical building, commercial property insurance also covers the inventory and all the tools contained within the commercial space that you use to do business.

Like home insurance, your commercial property insurance will include a list of the covered “risks” against which you are protected. For example, fire and vandalism are 2 of the most common risks covered. If you need protection against things like earthquakes or floods, you will need to purchase an add-on that extends your coverage to those circumstances.

Business Owner Policy (BOP)

Most small business owners who need general liability insurance and commercial property insurance invest in a business owner insurance (BOP) policy. A BOP combines both types of coverage from a single insurance provider, saving you money on both premiums. A BOP is also easier to manage than 2 separate policies.

Workers’ compensation insurance

Worker’s compensation insurance is a type of coverage that helps employees pay their medical bills if they are injured while performing work-related tasks. If an employee is killed while working, workers’ compensation insurance can cover the cost of final expenses on behalf of the family. Depending on where you live, you may need to purchase workers’ compensation insurance as soon as you hire your first employee.

Professional liability insurance

Sometimes called “errors and omissions coverage,” professional liability insurance protects you against legal costs if a client decides to sue you for negligence specifically related to the services you provided. Professional liability insurance is different from general liability insurance because it protects you against claims that you have performed your work in a negligent or fraudulent manner. This type of protection will help you cover the cost of legal defenses and any judgments rendered by the court, even if the trial is deemed futile.

Commercial auto insurance

If you use any type of commercial vehicle in your business, it is essential that you purchase a commercial auto insurance policy as your personal policy is unlikely to cover you when you use your vehicle for business purposes. Like personal auto insurance policies, you can purchase commercial collision insurance and comprehensive coverage to compensate you for any damage to your vehicle. In most states, you are legally required to purchase both personal injury liability insurance and property damage liability insurance for each commercial vehicle you drive. Minimum coverage varies by state.

Cyber ​​liability insurance

If your business stores medical information, customer credit card details, or any other type of sensitive information, you could be a prime target for a cyber attack. Most commercial property and general liability insurance policies do not include coverage for cyber liability insurance. However, you can protect yourself by adding a separate policy to your list of coverages. Cyber ​​liability insurance can help you cover legal costs if a customer sues you for negligence, business income for the time your network is offline, any ransom demanded by hackers to restore network connectivity, and more.

Alcohol liability insurance

If your business manufactures, sells, or distributes alcoholic beverages, you may need to purchase alcohol liability insurance. This coverage is especially necessary if you live in one of the 44 states that have “dram laws” that hold businesses accountable for the actions of intoxicated people who have been served alcohol in their home. establishment. These laws also allow third parties who are injured by an intoxicated person to claim damages from both the person who caused the damage and the company that served alcohol to the person. Alcohol liability insurance can help protect you against these claims by paying for a portion of your legal defense and any court judgment against you.

Why bother with all this confidence?

Paying for all of these types of insurance can seem like a major burden on your business. After all, it’s entirely possible that you could invest in more than one type of coverage and never use your insurance benefits. Unfortunately, the truth is, you have no control over when a client or client might sue you, even if you haven’t done anything wrong. Making sure your business is covered by multiple types of insurance will help you rest easy knowing that you won’t face millions of dollars in legal fees if a client sues you.

Benzinga’s Best Small Business Insurance Providers

Ready to learn more about getting the small business insurance you need to stay protected? Check out some of our favorite insurers below.

Your insurance options for small businesses

After seeing the number of potential dangers your business can face on a daily basis, you are probably thinking about increasing your coverage. It’s important to remember that no matter what type of insurance you choose, you should always allow yourself plenty of time to compare policy options between competing insurance providers in your area. Whether you’re investing in a comprehensive business owner’s insurance policy or a little extra umbrella coverage, you can often save money by getting quotes from a few providers before you make your final decision.

Frequently Asked Questions

What insurance would I need for my business?

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What insurance would I need for my business?

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Sarah horvath

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The types of insurance you will need as a small business owner will vary depending on where you live and the type of business you run. If you are working in a commercial space, you should start with a commercial property and general liability insurance policy. If you have at least one employee, you may also need to purchase workers’ compensation insurance. Speaking with a local insurance agent can help you understand your coverage needs as a small business owner.

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Benzinga

What insurance would I need if I was running my home business?

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What insurance would I need if I was running my home business?

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Sarah horvath

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If you operate your home business, check with your home insurance policy provider to learn more about home business coverage. Many large insurance companies offer extensions to owners of small businesses who work from home.

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Benzinga

Benzinga has developed a specific methodology for classifying business insurance. We have prioritized carriers based on coverage options, types of businesses served, customer service experience, and how quickly and easily you can make sure, including using online tools. . We have also included business insurance quote aggregators in lists to make it easy and efficient to compare quotes and policy options. To see a full breakdown of our methodology, please visit our Commercial Insurance Methodology page.

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