Insurance for the Small Business Owner

What kind of coverage do you need, and why?


Do you own a small business? Are you starting one? What kind of insurance should you have? Truthfully, you should consider (and preferably have) three kinds of insurance for your business and its assets.

Liability insurance. Absolutely essential. If you run a small business, especially one that provides services of some kind, you will inevitably be sued someday or at least threatened with a suit. Liability insurance will help you if your services or products cause harm to someone or their property. In such cases, liability insurance pays for some or all of the damages, plus lawyer’s fees and court costs. Doctors and lawyers wouldn’t dream of practicing without this coverage, which is called Errors & Omissions (E&O) insurance in the medical and legal fields.

Workers’ comp insurance. Presuming you have employees, you will need this. In fact, the state in which your business is located may require it. If you have an employee that falls ill or suffers an injury that is work-related, workers’ comp coverage can cover the costs of their medical bills and some or all of the wages they have lost by being away from work. In different states, workers’ comp insurance offers different degrees of coverage; it doesn’t always cover independent contractors, and the number of workers you many insure varies.

Property insurance. Acts of nature, acts of violence, and accidents can all damage your business. And physically, where is your business? If you lease space in a building you don’t own, you need to understand that the property owner’s building insurance will not protect your business assets, so additional property insurance is a very, very good idea. If you work from a home office, your homeowners policy will probably not insure your business assets either – very likely, you will have to get a separate policy to properly insure them. Do you actually own the building your business is based in? Then undoubtedly you have business property insurance. You should still review your policy to make sure what it does and doesn’t cover. You may need to extend the coverage to apply to what isn’t real property (office machines, furniture, appliances, and any goods of value that you store or warehouse).

If you have questions about business insurance or suspect that your business may be underinsured, talk with a qualified insurance professional today who can help you take a look at your options.



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