The right approach to insurance contributes a lot to the success of a small business.
According to the US Small Business Administration, over 600,000 small businesses start up each year in this country. Within 18 months, a large portion of those businesses also fail. While there are several reasons why this happens, a lack or insufficient amount of insurance can put a business at serious risk and contribute to its failure.
To avoid that, it’s important to know what types of insurance are available and recommended for your small business. While our first piece of advice would be to discuss your options with a local independent insurance agency like ours, let us help you get the conversation started.
Any business can become subject to a liability claim which could shutter a business permanently if the right insurance isn’t in place. Two of the most common and useful forms of liability insurance are general liability insurance and professional liability insurance.
General liability insurance covers claims that involve bodily injury or property damage that may be connected to your business. Examples of this could include a customer slipping on a wet floor or a plumbing installation going wrong and resulting in a flooded basement.
Professional liability insurance addresses lawsuits regarding any errors or omissions made by your business in the course of providing a service. Common forms of this are claims of negligence, substandard delivery, or breach of contract.
Business Owner’s Policy
A business owner policy (BOP) bundles the basic coverage a small business requires into a single policy and is often less expensive than individual policies combined. A BOP often includes coverage for major property and liability risks, business interruption insurance, victim of crime, spoilage, and more. Our agents look at several factors when deciding what kind of BOP is best for you. These factors include such things as location, size, type of business, and earnings.
Business Interruption Insurance
When a business experiences loss of income due to disaster—either due to a forced closing or need for rebuilding—business interruption insurance can help recover some of that loss. This can cover costs associated with operating expenses, moving to a new location, payroll, taxes, or even loan payments.
Unfortunately, issues related to communicable diseases such as COVID-19 are usually not covered.
Additional Insurance to Consider
The Small Business Administration lists a few more types of insurance they recommend businesses look in to, and how to go about buying business insurance. Other types of insurance include:
- Product liability insurance protects against financial loss resulting from a defective product resulting in injury or bodily harm.
- Commercial property insurance protects against loss and damage of company property from events such as fire, flood, storms, and vandalism.
- Home-based business insurance is usually added to one’s homeowner’s insurance and can offer coverage tor liability and some business equipment.
Protecting Your Business
In addition to legally-required insurance connected to any employees you may have, your business could be at risk of a lawsuit for any number of reasons or require coverage for your assets in case of disaster.
Take steps ahead of time to protect your business from these risks by talking with your insurance agent about what kind of coverage is best for you.
This article was sponsored by Ballantyne Business Center, which offers executive suites and private offices for small businesses in the Charlotte area.