Identify your risks and get the right coverage
Insurance may seem like an expensive purchase for your small business, but it's an important safeguard against the many risks facing your company. Lawsuits, natural disasters and injuries to you or your employees could threaten your business at any time, so knowing the basics of business insurance is critical.
The most affordable way to insure your small business is a Business Owner's Policy (BOP), which bundles several of the basic insurance policies into one neat package. You can get instant BOP quotes online at a variety of insurance comparison websites. BOPs offer less flexibility when determining your coverage limits, but they usually provide you with the chief insurance you need:
1. General liability insurance protects your business assets if someone is injured as a result of using your product, or is injured in the general operation of your business, or if negligent acts or omissions result in bodily injury or property damage on your premises. In the event of these misfortunes, general liability insurance will cover the cost of the damages and also the legal fees and other costs associated with your legal defense.
2. Property and casualty insurance covers your physical property, such as office furniture, company machines, and the building structure, in the event of burglary, fire or hazardous weather.
3. Business Interruption Insurance protects your income and any expenses incurred to keep your business going in the event of natural or man-made disasters, such as earthquakes, floods, or explosions.
While a BOP provides you with the essentials, there are still other insurance policies that may be necessary for your business:
1. Workers' compensation is required in almost every state. This insurance protects you from lawsuits resulting from workplace accidents and provides medical and rehabilitation care and compensation for lost income to injured employees.
2. Professional liability insurance is critical in many industries for additional liability coverage. Errors and omissions insurance (E&O), or professional liability insurance is common for consultants, accountants and medical practitioners because it protects against negligence or errors in their work. Another add-on is employment practices liability insurance (EPLI), which protects your business against wrongful termination, sexual harassment or race and gender discrimination claims.
3. Business vehicle insurance is necessary if you have any company cars, trucks or other vehicles. As with personal auto insurance, you can save money by raising your deductible or forgoing comprehensive and collision coverage.
4. Umbrella policies provide an extra layer of coverage in case your other policies leave certain liabilities uninsured or don't have high enough limits. Contracts with landlords or vendors sometimes require high limits of insurance, and an umbrella policy would allow you to increase your coverage.
Compare quotesOnce you've identified which policies are right for you, shop around to compare prices. Joining a trade association in your industry or a group such as the National Federation of Independent Businesses can get you special rates on small-business policies.
Connect with an agent
While price is important, it's more important that you find the right coverage for your business. A good commercial insurance broker can save you money and find a policy that meets your business needs.
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