This Is Why Small Business Insurance Is So Important

Imagine the following scenario. You are excited about your new small business, a quaint downtown shop selling trinkets and homemade crafts. Business is booming since it’s the summertime. You just mopped the floor but forgot to put up a wet floor sign. All of a sudden, one of your employees slips, falls, and injures themselves. Without any insurance coverage, this could end up costing you big time. You could even lose your business.

Many small business owners look at the cost of insurance coverage in a vacuum, deciding that maybe insurance coverage is something they can forgo or just get the bare minimum of. After all, many types of small business insurance are not required by law. The potential risks are too great to justify this decision, however, since one accident can cost thousands in legal fees, leading to the closure of your business.

Here is more about business coverage and why it is crucial for you as a small business owner to protect your business.

What Kinds of Coverage Are There?

Liability Protection: This kind of protection helps to shield you from general claims of bodily harm, property damage, slander, or libel. This kind of policy would cover any attorney fees you might incur in case of one of these events.

Commercial Property Protection: This type of insurance coverage is for businesses with physical locations. In the event of theft or fire damage to business equipment, a commercial property policy will give you peace of mind and help you get back up and running again.

Workers Compensation: If an employee is injured on the job, this kind of coverage will help pay medical bills and replace lost wages for your employee.

Employment Practices Liability: Business owners are responsible for all sorts of compliance procedures, including fairness in hiring. In the event of a lawsuit that an employee or a potential employee might file against you claiming wrongful termination, breach of contract, harassment, or various kinds of discrimination, this type of insurance coverage will help cover your legal fees.

How Do You Decide Which Policies to Choose?

Every business is different. Of course, some policies are dictated by law depending on the type of business you operate. Others are optional, but having a robust policy in place can prevent financial disaster in many circumstances that would otherwise lead to bankruptcy or the closure of the business. The policies that you will need are entirely based on your unique situation and what you need to give you peace of mind.

Some businesses see customers in person every day, so general liability coverage is an absolute must in case one of them has some sort of accident. Others have employees that work from home, or have a lot of expensive business equipment that needs protecting.

Maybe you do not have any employees and you run your business from home. Every situation is different. Like every sound business decision, then, what you need to start with is a cost-benefit analysis.

What are the risks that you face? How costly would it be if those risks are ignored, and the worst-case scenario comes to pass? Choose policies that best hedge against those risks, and then ignore those that are unnecessary for the kind of business you run.

Compare Quotes

After you have done your cost-benefit analysis, the time has come to compare quotes to see who can give you the best deal. Look at all the options before making your choice. Which agents or brokers have the best reputations?

Be sure to develop a personal relationship with your broker, since any relationship is built on trust. A good broker can also make recommendations about what type coverage is a must for your situation and what types of coverage you can skip.

Be mindful, too, that your coverage needs will change as your business grows and develops. Business owners should keep a keen eye on their employees’ needs, how many customers they have daily, any physical property they need to protect, and when and where they are doing business.

The kinds of coverage you purchase should not remain static. Do not be afraid to change your policies and continually seek out the best deals. The bottom line is your bottom line. Adequate insurance coverage gives you the confidence to protect your business from harm and achieve even greater success.

Conclusion

Leaving your business open to all sorts of liabilities is the perfect recipe for business failure. One accident could end up costing you your livelihood. Savvy business owners know that sound business plans involve weighing risks against potential costs, monetary and otherwise.

With the right policies, your business will be protected against the sorts of risks that you may encounter both in everyday and extraordinary circumstances. So contact local brokers, ask them about the policies that they have on offer, and choose what is right for you based on your specific needs.