Owning a small business can be one of the most rewarding feelings in the world – being your own boss, building something from the ground up, succeeding against the odds. However, it’s important for small-business owners to understand the risks associated with their endeavors, as well as how to minimize them. This is where business insurance comes in.
Running a small business can mean constantly weighing costs and benefits, but business insurance is an investment with benefits that far outweigh the costs. Even if your small business operates in a seemingly low-risk industry, the peace of mind that comes with a business insurance policy is well worth the expense. After all, no one can predict the future, and anything from natural disaster to burglary can cause a small business to close its doors. Luckily, with the right coverage, small business can ensure they remain on track even if the worst should happen.
Types of business insurance
Business insurance can come in many forms. What a business will require depends on the type of industry it operates in, as well as how it is structured.
The most common type of business insurance is general liability coverage. This type of insurance protects businesses against legal action associated with accidents and injuries. Product liability coverage, on the other hand, provides protection from accidents and injuries arising from a faulty product.
If a business doesn’t manufacture or sell products, they may require professional liability coverage. This insurance protects business that offer services – such as automotive repair facilities – from legal action associated with malpractice, negligence and errors.
In addition to insurance policies offering coverage from legal action, small businesses must take into account the actual properties they’re housed in. Commercial property coverage will help businesses pay for the loss or damage of business-related property, such as computers, stock items, documents and the building itself. This type of insurance covers businesses from damage occurring from fire, smoke, vandalism and other detrimental instances.
Of course, small businesses that are operated out of a residential home also need to make sure they’re properly insured. Homeowners’ insurance policies rarely cover damage and loss from home-based businesses, as well as liability claims stemming from such operations.
Benefits of business insurance
The most obvious benefit of business insurance is knowing that financial loss arising from liability and property damage will not lead to a business going under. However, there are other benefits as well.
For instance, if a business needs to take out a loan or find investors, being able to show that it’s properly insured can go a long way toward easing people’s minds. Lenders and investors want to make sure their money is safe, and will likely be unwilling to do business with anyone who doesn’t have the right coverage. Getting a personal loan or attracting new investors will be much easier with business insurance.
Additionally, any owners rely on transactions with other business will find that it’s much easier to conduct business when they are insured. Customers, clients and vendors want to work with businesses that will not be ruined by sudden damage or loss.
Legal requirements
Besides the benefits that business insurance can offer, it’s also legally required for many businesses. If a small business has employees, it must have workers’ compensation coverage. If a business doesn’t have this type of insurance, it can face penalties, as well as be required to pay for injuries incurred by workers on the job.
Also, depending on their location, businesses are required to have unemployment and disability coverage.
Mountain America can help
Mountain America Insurance has partnered with Moreton & Company to provide business owners with a series of helpful seminars intended to shed light on different business insurance-related topics. These seminars are free and cover everything from healthcare reform to cyber liability.