Small Business Insurance Essentials

Running a business can be an extremely hazardous venture. An unexpected accident, lawsuit or natural disaster can cause devastating financial harm and even ruin a small business.

Business insurance is an invaluable way to safeguard your company against various hazards. Whether you’re just starting out or have been in operation for years, it’s essential that you understand all of your options and how they can assist your business in succeeding.

Business Owner’s Policy (BOP)

Business Owner’s Policy (BOP) packages general liability and property insurance into one convenient package. This is ideal for small businesses that need basic protection but may not have the time or funds to purchase separate policies.

A Business Owner’s Policy (BOP) might also include business interruption insurance, which protects income in case a company’s operations are disrupted due to an insured event like fire or other natural disasters. This can cover rent temporary premises or relocation costs as well.

Business owners frequently add additional coverages to their Business Owner Policy (BOP) such as crime insurance or off-premises utility services, data breach insurance, and more.

The cost of a Business Owner Policy (BOP) varies based on your business and risk profile, but it’s an essential safeguard for your company’s financial wellbeing. It’s especially essential for new businesses with limited resources as one accident could make small businesses unprofitable or even impossible to survive.

General Liability Insurance

General liability insurance is the most essential policy for a business to have. It covers medical expenses and attorney fees that could arise as a result of bodily injuries or property damage for which your business is legally responsible.

Additionally, your company’s liability coverage covers any costs incurred in defending yourself against claims of libel, slander and copyright infringement.

Furthermore, it can shield your business from a lawsuit for personal injury claims.

Even if you do not need to carry it, some clients, contractors and landlords require proof of coverage before they will work with you.

General Liability Insurance is essential for business owners; without it, they could face judgments, legal settlements and lawyer fees that could bankrupt their operation. NerdWallet strongly suggests that every business owner obtain this policy.

Commercial Auto Insurance

Commercial Auto Insurance is essential for businesses, whether you own a single work truck or an entire fleet of delivery vehicles. These policies shield your company in case one of your vehicles gets involved in an accident and the driver is at fault.

Many states require businesses to carry liability coverage for owned cars, trucks and vans as well as any vehicles crossing state lines to transport people or goods. Furthermore, these policies should also apply to any non-owned cars or trucks your employees drive to work.

Your commercial auto policy is an agreement between you and your insurer that reimburses you for losses caused by accidents or other events. Typically, this coverage includes bodily injury and property damage liability protection; however, you may opt to purchase additional physical damage coverages like collision, comprehensive and specified perils. Speak to an independent agent about these optional protections to best safeguard your business.

Workers’ Compensation Insurance

As a business owner, having Workers’ Compensation Insurance is essential. This coverage is mandated in most states and provides your employees with medical care, wage benefits and disability pay in case they sustain an injury on the job.

Your business can also be safeguarded financially if an employee files a claim for workplace injuries against you. You can obtain workers comp from either private insurers or state funds, or purchase self-insurance to cover these costs.

Premiums for workers’ comp insurance are determined by your business’ industry classification code, payroll details, and claims history. Furthermore, your location can affect costs as well.

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