Best insurance for fast-moving small business

One of the many decisions a small business owner needs to make to ensure their success is to determine the type of small commercial insurance they need to protect their property, employees and products. (Photo: zabanski – stock.adobe.com)

An anonymous quote says: ”Small business isn’t for the faint of heart. It’s for the brave, the patient, and the persistent. It’s for the overcomer.” Every day, small business owners are faced with an array of responsibilities and decisions that could often make or break their organizations. While being an entrepreneur, running your own company and fulfilling your life’s passions is a dream for many, being a small business owner comes with many risks.

Small business owners often move at a very fast pace — setting strategies, reviewing budgets, managing staff and inventory, and many other daily duties. One of the many decisions a small business owner needs to make to ensure their success is to determine the type of small commercial insurance they need to protect their property, employees and products. Federal law mandates that small business owners must have workers’ compensation and unemployment, while some states also require additional insurance, like disability insurance.

Insurance is not a one-size-fits-all affair. Depending on the type of products and services the organization provides, many types of small business insurance coverages could be very important for the business.

Small business insurance policies every owner should consider

Before even launching a small business, entrepreneurs should investigate and consider investing in the following insurance policies:

• Business owners policy: A business owners policy, or BOP, bundles commercial insurance coverages, such as general liability and property insurance coverage. A business owner’s policy is a type of commercial insurance policy that bundles insurance coverages that you would normally separate. The bundled approach can also provide discounts on the overall cost. A BOP often includes:
• Commercial property insurance: Commercial property insurance covers buildings you own or rent from fire, smoke, wind, hail, storm, hurricane, tornado or vandalism damage. It also covers desks, equipment, tools, computers and your business’ files. Additional policies can be purchased on a state-by-state basis for flood or earthquake damage.

• General liability coverage: General liability insurance can provide coverage for bodily injury or property damage from incidents that occur on your premises or from your products or operations, certain legal defense costs — if your company is sued, and reputational damage due to libel, slander or copyright infringement.
• Business interruption: Business interruption insurance is additional coverage to commercial property insurance. It protects your business against loss of income if an issue disrupts operations at your normal location due to a fire at your neighbor’s location that impacts your productivity.

• Workers’ compensation insurance: Most states have a workers’ compensation insurance requirement. Each state will vary with the number of employees that a company must cover. The insurance covers the costs if an employee is involved in a work-related injury. Check with your insurance broker to see if you must purchase it from a state-run program (e.g., North Dakota, Ohio, Washington, and Wyoming) or if you can buy it from your broker.
• Cyber Insurance: Credit card data, names, phone numbers, addresses, driver’s license numbers, health records, and even social security numbers can quickly find themselves in the wrong hands with a few strokes of the keyboard. Cyber liability insurance can protect your company against damages for a network security or privacy breach in which customer data or confidential corporate data is exposed or stolen by a hacker.

Supplemental small business insurance coverage

In addition to the core of the small commercial insurance policies shared above, there is supplemental business insurance coverage that needs to be considered:

• Employment practice liability insurance: Every business owner must protect themselves in the event of an employment-related claim. With employment practice liability insurance, employers are protected from certain employment-related legal disputes between employers and their employees, former employees and job applicants, such as age, race, sex discrimination, sexual harassment, retaliation, failure to promote and wrongful termination.
• Professional liability insurance: If your business provides a service, you might consider adding professional liability insurance, which protects against dissatisfied customers. Keep in mind that personal liability on a homeowner’s insurance policy does not protect home-based businesses for professional use.
• Inland marine insurance: Property insurance is location-specific, and a business’ products are usually only covered within 500 feet of their business. To cover product that is moving by boat, airplane or truck, you should consider inland marine insurance.
• Company vehicles: Commercial auto insurance protects your company vehicles. The coverage is vehicle specific and does not travel with the driver. You might also consider adding non-owned auto liability to your policy for employees using their personal cars for business purposes.
• Protect convention trade show booths and employees: A trade show booth is an extension of your business. If your company exhibits at many conventions throughout the year, you may need trade-show-specific liability insurance, which will cover you if an employee, a volunteer, or a visitor to your booth is injured in the convention hall. 

Tips for small business owners when considering insurance needs

Each business has its unique insurance risks and requirements. Since there are several small commercial insurance options, you must understand the level of risk before you choose your coverage. A few tips to help you in the process:

• Insurance for remote workers: More and more companies today offer the option for employees to work remotely. And, if your company or its employees are home-based, you’ll need insurance above and beyond a standard homeowner’s policy, which is not designed to cover the specific needs of a business.
• Offer employee healthcare: Employee health insurance is not a part of small business insurance commercial coverage. However, depending on the number of employees, you might be required to offer healthcare options. The Affordable Care Act (ACA) mandates that employers have sponsored healthcare coverage for businesses with 50 employees or more.
• Compare insurance policy quotes: Comparing quotes from multiple providers when looking for small business insurance can get you the most comprehensive coverage for your insurance needs at the best price.
• Have a good agent or broker: An insurance agent is the person you rely on to protect your business. Just as you compare your options for your insurance plan, consider and compare different agents or brokers.
• Always review and update the policy every year: Your business’ needs change, and so should your insurance. Most insurance policies must be renewed and can be updated every year. Make sure to review the policy, coverage and any changes for the upcoming year.

Maeghan Gorman is a marketing communications manager at AmTrust, a leading property & casualty insurer. She has her P&C license through the Ohio Department of Insurance and works with a variety of products within the P&C space. Reprinted with permission from AmTrust.

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