The SBA estimates that there are almost 28 million small businesses in the United States. That staggering number is surprising to some but not so surprising to other business owners.
Because business owners understand the tremendous value owning and operating your own organization offers. The freedom to set your own hours, the freedom to give yourself raises, scheduling flexibility… the list goes on.
While the benefits of owning a business are pretty straightforward, some aspects of business ownership are not.
Insurance, for example, is something that many small businesses miss the boat on.
As a business owner, especially if you’re just starting out, one unplanned problem could sink your organization. To help you protect yourself from adversity, below, our team has compiled a list of 8 integral types of business insurance that you should consider getting immediately.
1. Property Insurance
If you’re like most business owners, you either own an office space or own expensive equipment you store inside of a leased space. Either way, you’re going to want property insurance.
Property insurance can not only help protect your physical business location but it can also insure you against losses for equipment inside of it. That means if a fire were to ever occur, theft, or any other unplanned event, you wouldn’t have to worry about getting your computers and other valuables replaced.
2. Liability Insurance
Every business needs to have a general liability insurance policy. These policies protect your bottom line from a number of common issues that arise during day-to-day operations.
For example, if your employee were to hurt their hand while operating a piece of your equipment, liability insurance could help cover you for that. Alternatively, if one of your products caused harm to a customer, liability insurance would protect you from ensuing damages.
3. Worker’s Compensation
Most states will require you to carry worker’s compensation insurance for your employees. Consequently, this is one of the most common types of business insurance you’ll find companies investing in.
A worker’s compensation policy is specifically for workplace injuries incurred by the people who work in an organization. It helps those injured cover their medical expenses, time they need off work, and (in conjunction with your general liability policy) protects you from lawsuits.
4. Flood Insurance
Many business owners are surprised when they find out that their property insurance doesn’t cover floods.
The truth is, in most cases, a flood policy is one of the types of business insurance you’ll need to buy separately. This is particularly true in flood-prone areas.
Assess whether or not floods are likely where your business is located and buy a flood policy based on your findings. Even if you aren’t in a flood prone zone, you never know when one might occur.
For that reason, especially since flood insurance is dirt cheap outside of flood areas, you may want to consider getting one no matter what.
Learn more here about flood insurance.
5. Commercial Auto Insurance
If your business owns vehicles, they need to be insured before hitting the road. That fact may not come as much of a surprise to you but what may be surprising is that if your vehicles are being used for commercial purposes, you may be required to carry commercial auto insurance. Make sure to shop around to compare auto insurance companies to find the best rate and save on your business costs. You will need to make sure you get full coverage for your drivers so that financial risks like accidents are minimized.
That means that your general auto policy may not be covering your business-used vehicle.
Commercial auto insurance will protect you and your employees when operating your commercial vehicle. It will also protect the valuables you’re transporting from job site to job site.
If you’re covering your commercial vehicle under your personal auto policy, be sure to contact your insurance provider to make sure you’re covered. If you’re not, upgrade to a commercial policy immediately.
6. Data Breach Coverage
IBM estimates the cost to a company for a data breach being in the vicinity of 3.9 million dollars. If losing that much money sounds detrimental to you, you’ll want data breach coverage.
Data breach coverage can comprehensively protect you from fallout that results around your company’s servers getting compromised and your customer data getting stolen.
7. An Expanded Home Owner’s Insurance Policy
Do you run your small business out of your home? If you do and you think your homeowner’s insurance policy has you covered, you may want to think again.
Some homeowners insurance policies have limits on what business items are covered (and up to a certain dollar amount, usually $2500). Others may have provisions in place that allow them to avoid paying out if commercial operations are taking place within your dwelling at all. To make sure that your business and home are taken care of, explain your situation to your homeowner’s insurance agent and buy additional coverage if needed.
8. Business Interruption Insurance
You never know when your business operations might get disrupted by an earthquake, a terrorist attack or by any other event that prevents your business from operating. When an unplanned event keeps you from opening your doors, a business interruption insurance policy can help you avoid losses.
Remember, just because you can’t operate your business doesn’t mean that you get to stop paying your bills. With business interruption insurance on your side, you’ll be able to keep up with expenses while you get yourself back on track.
Wrapping Up Important Types of Business Insurance and Why You Need Them
We’ve just gone over all of the important types of business insurance you should consider. Our recommendation is to buy as many policies as you need to keep your company safe!
If you’re looking for more expertly crafted tips on how to run your business effectively, our team has you covered. At Catalyst For Business, our aim to give entrepreneurs like you the advice they need to help skyrocket their business to new heights.
Check out more of our content today!