Opening a small business is no easy feat and includes many important details to explore and establish. Owners must investigate and acquire necessary licenses, permits, rent or lease information, important tax documents, and more. Additionally, owners should confirm that their business is insured in the necessary areas.
Insurance options for small business owners depend on the type of product that a business offers. Certain companies will need to have a particular type of coverage depending on products or services they offer.
Ultimately, small business insurance works to protect a company from any financial harm that may arise, as well as safeguarding the company in the event that accidents occur.
Types of Business Insurance for Small Businesses
In general, there are a few types of insurance that all small businesses need, typically included in a business owner’s policy.
General Liability Insurance
If you are a small business owner, general liability protects you and your small business from any liability claims that may arise. These claims can occur if a customer is injured while on company property. Injuries may happen due to direct interaction with your product, such as a tool or sharp knife, or simply by slipping and falling.
This type of insurance will also cover property damage claims, which can be filed if a customer’s belongings are lost or damaged while on the property.
Finally, general liability will protect you in the case of a personal liability claim. These claims are filed in the event of personal defamation. Without this insurance, you would be forced to pay all costs of these claims out of pocket.
Business Income Insurance
Business income insurance, or business interruption insurance, will replace your lost income in the event of a natural disaster, property damage, or theft. This type of coverage is beneficial if a store closure is necessary to repair the property.
If the store must close down for months at a time to complete repairs, large amounts of revenue may be lost. Business income will assist in replacing the revenue that you would have earned during this time.
Additionally, business income insurance will protect you in cases of theft. This can be in regard to stolen product, or funds stolen directly from the business. Your insurance policy will cover the lost revenue while you work to replenish the missing product or funds.
Commercial Property Insurance
Commercial property covers the property, building, technology, furniture, tools, records, and any fixtures of your small business, whether owned or rented. This coverage is vitally important, as it protects your business and its assets from damages caused by fire, wind, and lightning, as well as theft or vandalism.
Without this coverage, any damage to the building, its fixtures, and virtually anything inside the physical building will not be protected. Any costs to repair or replace these losses would be paid directly out of your pocket as owner.
Every small business owner with a physical location should have this type of insurance to ensure that all assets are protected.
Depending on the nature of your small business, other types of coverage should be considered. While not included in a business owner’s policy, other policies may be necessary to protect you and your product from potential harm.
A few other policies to consider include:
- Workers’ Compensation Insurance
- Commercial Auto Insurance
- Professional Liability Insurance
- Commercial Umbrella Insurance
- Cyber Liability Insurance
When determining additional coverage, it is important to consider the reach of your business, as well as potential growth.
Looking for Coverage?
Are you a small business owner seeking guidance or coverage for your business? At GWK Insurance, our agents are experienced with business insurance and are ready to help. If you need guidance throughout this process, we would love to offer our services. Contact us today to schedule a consultation or to receive a quote.