As a small business owner, you know just how much work it takes to keep operations running smoothly on a daily basis – and just how costly disruptions can be. That’s why every small business needs strong insurance coverage.
If you’ve tried to get insurance before but found the process confusing or been scared away by costly options, you’re not alone. These are common obstacles small business owners encounter when seeking an insurance policy. That’s why we’ve put together this list of small business insurance tips – so you can get the best coverage for your business and your budget.
When looking for a comprehensive insurance policy, starting with what you must have is critical to laying the foundation for your business’s security and success.
Almost every business will have general liability insurance or a business owner’s policy(BOP). General liability insurance protects against costs your business incurs due to third-party damages. It’s important to understand that it does not protect your business’s assets.
However, it does give your business strong protection against going bankrupt due to the financial expense of bodily injury, property damage, defending lawsuits, medical expenses, and settlement bonds or judgments.
A business owner’s policy expands protections to include the coverage general liability provides and protects any commercial property, no matter how small or large. Examples include warehouses and office spaces. With a business owner’s policy, you can rest assured knowing that any damage to your business property is covered.
Cyber liability insurance could be considered as necessary for every business as a general liability policy or a BOP. If you protect customers’ personal data or house proprietary information on your computer, cyber liability insurance is a significant safety net for your business. Another way to look at cyber liability insurance is to assess the consequences if all of the technology your company uses crashes or gets hacked. How much operating time would you lose? How much money would you lose in the downtime? A cyber liability policy could cover those costs.
If you’re a consultant, an advisor, a creative, or in any other profession where what you sell is your expertise, errors and omissions (E&O) is a smart coverage option. E&O, also known as professional liability, covers:
Creative and other expertise-based professions can seem less risky than roofing or home renovations. However, it’s not necessarily a lower risk; it’s a different type of risk creative professionals may face.
Let’s imagine you’re a business consultant, and you give someone advice on how to market their startup. Their startup ultimately goes bankrupt, and they decide to sue you.
While most small business owners who work in consulting and creative industries never imagine being involved in a lawsuit, it can happen, and you want to make sure insurance will cover you if it does.
Workers' compensation is another “must-have” in certain business situations. In most states, it’s mandatory to have a workers’ compensation insurance policy, even if you only have one employee. Your workers' compensation insurance will cover different benefits in different states. Benefits across most policies include:
Workers' compensation is not only required but also benefits you, reducing out-of-pocket expenses. Coverage is usually provided no matter who is at fault, and most laws prevent an employee from suing you for a work-related injury.
One of the best small business insurance tips is to look into bundled policy options. Bundling policies can be vital to saving money for small business owners. BOPs can often be customized, depending on who your carrier is, to expand coverage beyond general liability and business property if you’d like to add an additional policy like cyber liability. You'll likely save money by investing in a customized bundle of policies instead of several separate policies.
It’s also essential to ensure you’re as communicative as possible with your carrier about the details of your business so they can look for all possible avenues to save you some money. The more your carrier understands your business operations, the better they can tailor bundled policies for you, and the better your chance of looking at a reduced premium.
While it’s often considered best practice to keep business and personal life separate, it’s not necessarily the best idea when buying insurance policies. If your carrier protects your business and personal assets, you may also have an opportunity for a reduced premium.
Another small business insurance tip is to shop around when you’re looking for an insurance policy. You can simplify the insurance search by talking to several carriers, involving an insurance expert, and getting in with an idea of what questions to ask.
We recommend getting quotes from at least three different carriers. Having several options to compare should give you a general idea of what you can expect to pay. Keep an eye out for options in either way that are out of the ordinary. If a quote is much lower than your other options, you can parse out why that might be with an insurance expert you trust. If a quote is much higher than some other quotes you’re receiving, you can discuss whether the benefits of that higher cost are worth it for you.
Different carriers may have different inclusions and exclusions. Inclusions are covered by the policy, while exclusions are specific exceptions to the policy.
Let’s use workers' compensation as an example. Workers' compensation almost always includes medical expenses, partial coverage of lost wages, death benefits, and disability benefits due to work-related injury or illness.
You should ask about specifics regarding these standard inclusions, like what percentage of lost wages will be covered. Some workers’ compensation policies have additional inclusions, such as coverage for mental healthcare and posttraumatic stress disorder care for first responders.
Most workers’ compensation policies have specific exclusions, such as injuries that occur while commuting, while intoxicated, or during a fight at work.
An important part of assessing your options is reviewing specific inclusions and exclusions with different carriers and determining what you would like to include in your insurance policy.
Your insurance purchase is ultimately your decision, but you don’t have to decide alone. Talk to a trusted insurance expert like those at CoverHound for small business insurance tips as you start the insurance process.
We can help you navigate your policy options, give you insight into your business’s risk exposure, and provide advice on what coverage is necessary to secure the future of your business.
With our insurance expertise and easy-to-use online platform that gives you over 50 carriers to choose from, you’ll find an insurance policy that gives you the security you need to succeed.
You’ve worked hard to build your business as a small business owner. Insurance can ensure that the progress you’ve made isn’t going anywhere. From foundational to business-specific policies, you can get comprehensive coverage and save some money with bundled policies customized for you by your carrier.
Remember – if you think insurance is too expensive, consider what one costly incident might do to your business. Insurance is an investment in your business, and the best time to invest is now.
CoverHound’s user-friendly insurance platform makes it easy for small business owners to compare insurance options and choose the right policy for their business. With insurance experts ready to answer your questions, no small business owner has to navigate the insurance process alone. Secure your future with CoverHound. Take our quiz now to discover personalized insurance solutions that fit your business's unique needs.
Insurance shopping simplified
Insurance shopping simplified
