Why you need small business insurance
Updated: Sep 22, 2020
Insurance Can Be a Tricky Business
Starting your own business is a big risk. There are a lot of different elements to consider. When providing services or products and dealing with both employees and clients, there is a lot of room for things to go wrong. What happens if a fire destroys expensive equipment? What would you do if an employee was seriously injured at work? Would you be able to pay for the medical bills and compensate the employee for lost wages? If they decided to file a lawsuit against you, it would likely bankrupt you and mean the end of your business. That’s where business insurance comes in.
Types of Insurance
Not all types of business insurance are legally required. If they apply to your business, you must have unemployment, workers compensation, liability, and disability insurance. Beyond that, it is up to you decide what type of protection you will need. Some people are deterred by the annoying cost of business insurance, but it is not much when you consider the cost of not having it. The cost of your insurance will depend on the size of the business. For example, if you have a small home-based business with only a few employees, you can probably secure all the coverage you need for less than $1000 per year. If, however, you have a large-scale business with any employees and a substantial amount of risk, it will be much more costly.
Insurance You Need
There are lots of different types of insurance that might apply to your business. For more details on that, you can read our article on Types of Insurance for Business Owners. There are very specific types that would cover things like embezzlement, for example. If that is an area of concern for your business, then you might want to add commercial crime and theft coverage to your Business Owner’s Policy.
The Takeaway
Always remember to pay close attention to the details of any policy you secure. For instance, if you are in an area where you are vulnerable to floods, you might want to add flood insurance to your standard property insurance. Make a list of all the risks to your business and do research so you can be sure you have the right protection. Due to the fact that needs vary for all businesses, the best course of action is to speak with an insurance agent. You want to find someone to customize your policy to fit your business.